Chinese Embassy in India on July 6 issued a statement, saying the “frequent investigations” by the Indian side into Chinese enterprises disrupt the enterprises’ normal business activities and damage the goodwill of the enterprises”.
Vivo directors Zhengshen Ou and Zhang Jie may have fled from India as the Enforcement Directorate (ED) intensified its inquiry into the money laundering case against the Chinese firm.
ED raided at least 44 places across India on June 5 in a money-laundering investigation against Chinese smartphone manufacturer Vivo and related firms. The searches were carried out under sections of the Prevention of Money Laundering Act (PMLA) at locations in several states including Delhi, Uttar Pradesh, Meghalaya, and Maharashtra.
The federal agency filed a money laundering case after taking cognizance of a recent Delhi Police (economic offences wing) FIR against a distributor of the agency based in Jammu and Kashmir where it was alleged that a few Chinese shareholders in that company forged their identity documents.
The ED suspects this alleged forgery was done to launder illegally generated funds using shell or paper companies and some of these “proceeds of crime” were diverted to stay under the radar of Indian tax and enforcement agencies.
The action is being seen as part of the Union government’s steps to tighten checks on Chinese entities and the continued crackdown on such firms and their linked Indian operatives that are allegedly indulging in serious financial crimes like money laundering and tax evasion while operating here.
The stepped-up action against the Chinese-backed companies or entities operating in India comes in the backdrop of the military stand-off between the two countries along the Line of Actual Control (LAC) in eastern Ladakh that is on for more than two years now.
