The Chinese smartphone manufacturer Vivo’s Indian subsidiary remitted 62,476 crore, or about 50% of its revenue, to China primarily to avoid paying taxes, the nation’s financial crime combating agency reported on Thursday.
The Enforcement Directorate (ED) stated in a statement that “These remittances were made to disclose significant losses in Indian incorporated companies to avoid payment of taxes in India.”
The ED said an ex-director of Vivo, Bin Lou, fled India in 2018 after incorporating many firms that are currently under its scrutiny. The ED started pan-India raids against Vivo Mobile India Pvt. Ltd. and its 23 affiliated companies two days ago. The ED claims to have proof that Vivo executives used fraudulent paperwork to incorporate the businesses.
According to the agency, the addresses mentioned were a government building and the home of a top bureaucrat and did not belong to them. Employees of Vivo India, including some Chinese nationals, were said to have “failed to cooperate with the search proceedings and tried to abscond, delete, and hide digital devices that were retrieved by the search teams,” according to the allegation.
Vivo has stated that the company is committed to strict adherence to Indian law and is working with the authorities. According to Counterpoint Research, the company has a 15% market share and is one of India’s top manufacturers of smartphones.
The move is regarded as a component of a larger initiative by the central government to tighten controls on Chinese organisations that have been charged with severe financial crimes like money laundering and tax fraud while operating in India.