India's Directorate of Enforcement or ED had previously conducted raids on Oppo and Xiaomi. Now it's Vivo that has come under scrutiny of ED.
ED has raided 44 locations across North India of Vivo and its distributors, under prevention of money laundering act (PMLA). Economic Times reports that the company was under investigation of CBI (Central Bureau of Investigation), which later passed the case over to ED.
Times of India reports that the investigation is based on the FIR registered by Delhi Police against the company's distributor in Jammu & Kashmir about forgery in documents relating to identity of some Chinese nationals. They also reported that according to sources at ED, the Chinese brands are making remittances to China, exaggerating expenses for software services and consultancy, and evading taxes in India.
Another report quoted an ED official saying: "We have come across many shell companies being operated in India by the Chinese company. All these are being used to launder money."
Response from Vivo
“Vivo is cooperating with the authorities to provide them with all required information. As a responsible corporate, we are committed to be fully compliant with the laws.” said a spokesperson for Vivo. Vivo hasn't put out a public statement regarding the raids till now.
Not the first brand to come under scrutiny
It is true that the government have been going after Chinese companies for some time now. Xiaomi, Oppo, and OnePlus have all come under scrutiny from various agencies over the past year. And with Xiaomi, they got their assets worth more than Rs. 5,500 Crores frozen.
Xiaomi claimed of no wrong doing back then, and they put out a statement saying that the royalty payments were legitimate. And it is meant for the in-licensed technologies and IPs that are used in Indian versions of the products.
ED is not the only agency investigating Chinese companies. IT department also conducted raids on various locations of Xiaomi, Oppo, OnePlus back in 2021.
