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ED arrests two Vivo India's executives

TraderKnows
TraderKnows
2023-12-26

In recent days, Indian authorities have arrested two executives of the Indian subsidiary of vivo mobile company, citing the crackdown on "financial crimes."

In recent days, The Enforcement Directorate (ED) have arrested two executives of the Indian subsidiary of vivo mobile company, citing the crackdown on "financial crimes." The arrested individuals include interim CEO Terry Hung (also known as Hong Xuquan), Chief Financial Officer (CFO) Harinder Dahiya, and advisor Hemant Munjal.

The vivo India subsidiary is accused of orchestrating a money laundering scheme worth $120 million. The Enforcement Directorate (ED) alleges that vivo India transferred these funds through shell companies and fake directors. In addition, the agency conducted raids on vivo India's offices and warehouses in July 2022, resulting in the seizure of approximately $50 million worth of assets and cash.

A source directly involved in the case stated that the arrested individuals were taken to a court in Delhi on the 23rd local time and subsequently sent to the enforcement agency's custody. They are scheduled to appear in court for trial on the 26th. A spokesperson for vivo expressed shock at the actions of the Indian government, stating that this operation indicates ongoing harassment by authorities, creating uncertainty in the entire industry. The company vows to use all legal avenues to address and challenge the allegations.

Prior to these recent arrests, ED had already detained four individuals related to the case, including Harry Om Rai, Chairman of mobile company Lava International, Chinese citizen Guang Wen (also known as Andrew Kuang), and chartered accountants Nitin Garg and Rajan Malik. These individuals are currently in judicial custody and have been summoned by a special judge. Earlier, a Delhi court formally accepted the chargesheet filed by ED regarding the money laundering investigation against vivo India and other involved parties.

This is not the first time Indian authorities have taken action against vivo. Since the outbreak of the India-China border conflict in mid-2020, the Indian government has noticeably increased regulatory scrutiny on Chinese companies and investments. It has been reported that since early 2022, several Chinese tech giants, including Huawei and Xiaomi, have faced consecutive investigations by government agencies in India. In October 2022, the Indian enforcement agency arrested four industry executives, including a vivo India subsidiary's Chinese employee, on money laundering charges. In response, vivo denied the allegations, emphasizing its commitment to lawful business practices.

In response to this incident, Chinese Foreign Ministry spokesperson Mao Ning addressed the series of events in the routine press conference on December 25. Mao Ning pointed out that the Chinese government is closely monitoring these events and firmly supports Chinese companies in defending their legitimate rights and interests. China urges India to fully recognize the mutually beneficial nature of China-India economic and trade cooperation and provide a fair, just, transparent, and non-discriminatory business environment for Chinese companies investing and operating in India. Additionally, the Chinese embassy in India will continue to provide necessary consular protection and assistance to the involved Chinese citizens in accordance with laws and regulations.

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