Vivo India gets $58 million seized after a massive money laundering probe

The Enforcement Directorate of India carried out searches at 40 locations of Vivo India, and the state agency revealed details about the probe. According to an official press release, the company transferred INR 62,476 crore (that’s nearly $8 billion) to China.

During the investigation, the ED seized 119 bank accounts with INR 465 crore (about $58 million) in them, as well as 2 kg gold bars, an extra INR 66 crore ($8.3 million) in FDs and 73 lakh (just under $100,000) in cash.

The statement by the Enforcement Directorate revealed the amount of money, funneled to China, is about half of all the sales Vivo India made. This was done “to disclose huge losses in Indian incorporated companies” and to avoid paying taxes on this money.

Vivo India directors Zhengshen Ou and Zhang Jie fled the country as the Directorate revealed that “some Chinese Nationals”, without mentioning any names, removed and hid digital evidence of the money laundering.

The money transfers were done through a shell company, based in Hong Kong - vivo India was registered as its subsidiary, and it had smaller entities in each major Indian region that operated on their own, at least for the books. Then they sent all profits to vivo India, which, being a subsidiary, directly funneled the funds into its parent company.

According to Vivo India representatives, the brand “has been cooperating with authorities and is committed to full compliance with the Indian law”. The parent company in China expressed hope that the ongoing investigations will be done in “a truly fair and non-discriminatory business environment”.

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