Vivo India transferred Rs 62,476 crore abroad, primarily to China, claims ED

The business allegedly transferred around Rs 62,476 crore of its revenue to China between 2017 and 2021 in order to avoid paying taxes in India.

The Enforcement Directorate(ED) on Thursday alleged that Chinese smartphone company Vivo India was involved in transmitting sizable amounts, a day after it is reported that two top executives of its affiliated company possibly fled India as a result of raids.

ED alleged that Vivo India transferred nearly Rs 62,476 crore, which is over 50% of the total revenue, out of India, primarily to China, from the total sale proceeds of Rs 1,25,185 crore.

According to the money-laundering investigation conducted by the ED against the mobile phone manufacturer, the business transferred around Rs 62,476 crore of its revenue to China between 2017 and 2021 in order to avoid paying taxes in India. "These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India," ED claimed in its statement on Thursday.

Enforcement Directorate claims that 18 firms that were purportedly formed fraudulently assisted the smartphone manufacturer in moving 50% of its revenue, primarily to China, outside of India.

The Prevention of Money Laundering Act (PMLA) has so far been used to take 119 bank accounts from organisations with a total balance of about Rs 465 crore, inclusive of fixed deposits of Rs 66 crore from Vivo India, 2 kilogramme of gold bars, and about Rs 73 lakh in cash, according to ED.

The federal agency has become aware of up to 22 firms founded by Bin Lou, an ex-director of Vivo, and another Chinese citizen named Zhixin Wei. Following the establishment of Vivo India in August 2014-15, Bin Lou established 18 firms, while Wei formed 4 companies.

An official claimed that Vivo India's records indicated losses in the majority of its partner companies when sending money to China.