Amid Chinese ‘warning’, ED raids Vivo, says the directors fled last year
Virendra Pandit
New Delhi: In a veiled warning, China on Thursday said the Indian probe agencies’ raids are damaging the business atmosphere as the Enforcement Directorate (ED) raided 44 locations of the Chinese smartphone brand Vivo India early this week.
Multiple investigations by the ED, which probes financial crimes, into Chinese companies are damaging the confidence of foreign entities investing and operating in the country, said Counsellor Wang Xiaotian, the embassy’s spokesperson, in his first reaction to the raids.
In Beijing, when asked about the ongoing raids on Vivo offices in several locations in India, Chinese Foreign Ministry spokesperson Zhao Lijiang said the Chinese side is closely following the developments on this matter.
“On July 5, the ED raided Vivo and its dealers at 44 production and operation sites across the country for allegedly violating The Prevention of Money Laundering Act (PMLA). We are following the issue closely,” he said.
“The Chinese government always asks Chinese enterprises to abide by laws and regulations overseas and firmly supports Chinese enterprises in safeguarding their legitimate rights and interests,” the statement added.
“The frequent investigations by the Indian side into Chinese enterprises not only disrupt the enterprises’ normal business activities and damage the goodwill of the enterprises but also impedes the improvement of the business environment in India and chills the confidence and willingness of market entities from other countries, including Chinese enterprises to invest and operate in India.”
The Chinese also tried to cajole their Indian counterparts.
“The essence of China-India economic and trade cooperation is for mutual benefit and win-win results. The bilateral trade volume between China and India strikes a historical record of over USD 100 billion in 2021, which reflects the huge potential and broad prospect of economic and trade cooperation between our two countries.
“China wishes the Indian side to investigate and enforce the law in compliance with laws and regulations, and effectively provide a fair, just and non-discriminatory business environment for Chinese enterprises to invest and operate in India.”
China’s comments came after the ED’s raids at 44 locations this week, targeting smartphone maker Vivo, owned by China’s BBK Electronics, and related firms in a money-laundering investigation.
They carried the searches out under sections of the Prevention of Money Laundering Act (PMLA) at locations in several states including Delhi, Uttar Pradesh, Meghalaya, and Maharashtra.
A Vivo India spokesperson said they’re cooperating with authorities.
Chinese directors Zhengsheng Ou and Zheng Jie of a firm GPICPL, in association with mobile maker Vivo, fled India last year, an ED official informed on Thursday, the media reported.
“Zhengsheng Ou and Zhang Jie are directors of GPICPL, a firm associated with mobile maker Vivo, and they fled last year,” he said.
The case is already being investigated by the Central Bureau of Investigation (CBI).
The 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.
The local units of OVIVO Mobile Communications are under the radar for alleged financial improprieties as part of the investigation into other China-based firms.
With Vivo, they sought an inquiry in April this year to detect if there were “significant irregularities in ownership and financial reporting”.
