India's Financial Crime Agency Accuses Vivo Employees of Visa Violations and Money Laundering

The financial crime agency of India has alleged that many employees of the Chinese smartphone manufacturer Vivo and its Indian affiliates concealed their employment status while seeking visas and violated rules by visiting the "sensitive" region of Jammu and Kashmir in the Himalayas. These accusations have come to light in a court filing that is not publicly available. The developments follow increased tension between India and China over business activities, with New Delhi imposing stricter controls on incoming investment and banning hundreds of Chinese apps after border clashes in 2020 resulted in casualties on both sides.

The recent arrest of a Vivo executive, Guangwen Kuang, is linked to a money laundering investigation initiated in 2022 involving India's second-largest smartphone maker. The Enforcement Directorate, the Indian financial crime agency, has alleged that at least 30 Chinese individuals entered India on business visas and worked for Vivo but failed to disclose their employment details on their visa application forms.

The agency's filing, spanning 32 pages, revealed that these individuals traveled to various parts of India, including the sensitive areas of Jammu and Kashmir and Ladakh, which constitutes a gross violation of Indian visa conditions. The agency stated, "Many employees of Vivo group companies worked in India without appropriate visas. They have concealed information regarding their employer in their visa applications and cheated the Indian embassy or missions in China."

Vivo, holding a 17% market share, expressed concern over the executive's arrest and reiterated its commitment to legal compliance. However, China's foreign ministry did not respond to a request for comment, and both the Indian embassy in Beijing and the foreign ministry in New Delhi remained silent on the matter.

In the ongoing border dispute, both India and China claim large territories controlled by the other in the western Himalayas. India has strict regulations barring foreigners from entering or staying in certain designated areas of Ladakh and parts of Jammu and Kashmir without a permit from the authorities, which is separate from a visa.

The money laundering investigation into Vivo and its associates began in 2022, with the agency conducting raids at 48 sites connected to the company. The investigation accuses Vivo of illegally transferring funds to China to evade Indian taxes through indirectly controlled companies. The recent court filing alleges that 1.07 trillion rupees ($12.87 billion) were sent out of India by Vivo to trading companies controlled by its Chinese parent, with the intent of evading government detection through a "masking layer." The Enforcement Directorate further noted that while no profits were reported between 2014-15 and 2019-20 in statutory filings, significant sums were transferred out of India.

Last July, the agency estimated that approximately 624.7 billion rupees ($7.5 billion) had been remitted to China mainly.

By fLEXI tEAM