Allegedly Avoid Paying Taxes And Money Laundering Actions In India, 119 Vivo Accounts In Blocks

Vivo is accused of avoiding taxes and money laundering in India. (photo: twitter @vivo_indonesia)

JAKARTA - India's financial crime agency said on Thursday, July 7, that it had blocked 119 bank accounts linked to India's Vivo's business holding 4.65 billion rupees (879 billion), as part of an alleged money laundering investigation by the Chinese mobile phone maker.

India's Enforcement Directorate said it had raided 48 locations of Vivo and 23 related entities this week. They alleged that Vivo India's sales proceeds were transferred outside India to show losses and avoid tax payments in the country.

Vivo, which is owned by China's BBK Electronics, did not immediately respond to a request for comment on the blocking of bank accounts. Earlier this week, Vivo said it was working with authorities in India and committed to fully complying with Indian law.

The directorate said in a statement that Vivo employees, including some Chinese nationals, did not cooperate during the search and "tried to run away, remove, and hide digital devices".

According to a Reuters report, India's financial crime agency also confiscated two kilograms of gold bullion and cash during the operation, he said.

News of the raid prompted the Chinese Embassy in India to call on a fair business environment for its companies, saying on Wednesday evening July 6, that various Indian investigations into Chinese companies undermined the confidence of foreign entities investing and operating in the country.

In Vivo's investigation, Indian federal agents accused the company of sending nearly 50% of its total sales of 1.25 trillion rupees (IDR 236.7 trillion) to China "to disclose huge losses to Indian legal entities to avoid tax payments in India". The investigation itself began in February 2022, the statement added.

Meanwhile, India's smartphone market leader, Xiaomi, has also been investigated since February. Even India's Enforcement Directorate in April confiscated $725 million in Indian company bank accounts. They also accused him of sending illegal money overseas "under the guise of royalty payments".

Xiaomi denies wrongdoing and the Indian court has temporarily lifted the blocking following the challenge from the company. The dispute case is ongoing at the Indian Court.

Many Chinese companies have struggled to do business in India after political tensions soared following border clashes in 2020. India has cited security concerns in banning more than 300 Chinese applications since, and tightening rules on Chinese investments.

Vivo is one of India's largest smartphone makers, with a market share of 15%, according to Counterpoint Research. Xiaomi owns 24% of the largest stake, while South Korea's Samsung Electronics owns 18%.