India’s Enforcement Directorate conducted searches across 40 sites of Vivo India and the state agency revealed details of the investigation. According to an official press release, the company has transferred INR 62,476 crore (that is almost $8 billion) to China.
During the investigation, the ED seized 119 bank accounts with INR 465 crore (about $58 million) as well as 2 kg of gold bars, an additional INR 66 crore ($8.3 million) in FDs and 73 lakh (just under $100,000) in cash.
The statement from the Enforcement Directorate revealed that the amount of money funneled into China is about half of all the sales Vivo India has made. This was done “to disclose huge losses in Indian companies” and to avoid tax on this money.
Vivo India directors Zhengshen Ou and Zhang Jie fled the country when the directorate revealed that “some Chinese nationals”, without naming them, were removing and hiding digital evidence of money laundering.
The money transfers were made through a shell company, based in Hong Kong – vivo India was registered as its subsidiary, and it had smaller entities in every major Indian region operating independently, at least for the books. They then sent all the profits to vivo India, which as a subsidiary funneled the money directly to the parent company.
According to representatives of Vivo India, the brand has “cooperated with the authorities and is committed to full compliance with Indian law”. The parent company in China expressed the hope that the ongoing investigations will be conducted in “a truly fair and non-discriminatory business environment”.