ED Raids at Vivo: Companies Who Operate in India Need to Follow Law of the Land, Says MEA

New Delhi, July 7: The Ministry of External Affairs (MEA) on Thursday stressed that companies who operate in India should follow the law of the land regarding the ongoing investigation related to Vivo Mobile Communications and some other Chinese firms.

In a weekly media briefing on Thursday by the Ministry of External Affairs (MEA), official spokesperson, Arindam Bagchi said, "Companies who operate here need to follow the law of the land. Our legal authorities are taking steps as per law of the land. I don't see the case to make comments as such on it."

Vivo India's nearly 23 associated firms such as Grand Prospect International Communication Pvt Ltd (GPICPL) transferred huge amounts to the firm and out of the total sale proceeds of Rs 1,25,185 crores, it remitted Rs 62,476 crores almost 50 per cent of the turnover out of India, mainly to China, the Enforcement Directorate said on Thursday. Vivo India Remitted Rs 62,476 Crore Abroad, Almost 50% to China, Says ED.

On Tuesday, Enforcement Directorate conducted searches at more than 40 locations including Uttar Pradesh, Madhya Pradesh and some southern states in connection in connection with a money laundering case registered against Chinese smartphone manufacturer Vivo.

The case is already being investigated by the Central Bureau of Investigation (CBI). IT department, as well as the Ministry of Corporate Affairs, are also keeping a close eye on the Chinese manufacturing firms. The ED raid is an extension of the probe against Chinese firms.

Answering on Vivo directors fleeing from India, Bagchi said, "We haven't received information from the authorities. It's a legal issue, as and when we will receive something and there is a need to speak with China, we have a system of mutual assistance."

The ED conducted these searches with respect to violations of the Prevention of Money Laundering Act (PMLA). Chinese directors Zhengshen Ou and Zhang Jie of a firm GPICPL, in association with mobile maker Vivo, fled India last year, an Enforcement Directorate official informed on Thursday.

The official corrected the report which mentioned that Zhengshen Ou and Zhang Jie were directors of Vivo and they fled when the ED intensified its inquiry into the money laundering case against the Chinese firm.

"Zhengshen Ou and Zhang Jie are directors of GPICPL, a firm associated with mobile maker Vivo, and they fled last year," the ED official told ANI requesting anonymity. The local units of Vivo Mobile Communications are under the radar for alleged financial improprieties as part of the investigation into other China-based firms.

Ministry of Corporate Affairs is learnt to have a special focus on potential violations including fraud. In the case of Vivo, an inquiry was sought in April this year to detect if there were "significant irregularities in ownership and financial reporting".

This is the second big case that the ED has registered against a Chinese cellphone company. Earlier, it had booked Xiaomi, another Chinese cellphone manufacturer, for allegedly making illegal foreign remittances in violation of the Foreign Exchange Management Act (FEMA).

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