The Enforcement Directorate (ED) of India has filed a supplementary chargesheet against Vivo China, accusing the company of serious financial irregularities. The chargesheet alleges that Vivo China exerted undue control over Vivo India and its network of 23 state distributor companies (SDCs), effectively monopolizing the company’s operations in the country.

Allegations of Money Laundering and Misrepresentation

The ED claims that Vivo Mobile Pvt Ltd has remitted a staggering Rs 70,837 crore out of India since 2014, under the guise of payments for imports. These imports allegedly originated from entities based in Hong Kong, Samoa, and the British Virgin Islands, which the ED believes are controlled by Vivo China. The agency estimates the proceeds of crime in this case to be close to Rs 20,241 crore.

Further, the ED alleges that Vivo China attempted to conceal its control over Vivo India by creating a complex web of special purpose vehicles (SPVs) and offshore entities. This elaborate structure, involving companies like Multi Accord Limited and Lucky Crest in Hong Kong, allegedly allowed Vivo China to maintain control over Vivo India while distancing itself on paper.

The chargesheet also accuses Vivo India and its 23 SDCs of “wilfully misdeclared” its beneficial ownership to the Indian government. Additionally, the ED claims that Vivo China used an Indian company called Labquest Engineering as a front to carry out retail business activities, in violation of India’s FDI policy.

Arrests and Ongoing Investigation

In December 2023, the ED arrested seven individuals in connection with the money-laundering probe against Vivo India. The investigation is ongoing, and further developments are expected.