- Kyle Chua
India Raids Vivo Offices Over Alleged Tax Fraud
Chinese smartphone maker Vivo has seemingly found itself in the crosshairs of the Indian government, having been accused of tax fraud by the country’s anti-money-laundering agency.
The Enforcement Directorate (ED), the agency handling the case, announced on Thursday, 7 July, that it has seized a total of 4.65 billion rupees, which equates to about US$59 million, in bank accounts, cash and gold bars from the company in 48 separate raids. The agency alleges that Vivo remitted 624.76 billion rupees, half of its local sales, outside of India, mostly to China, to avoid paying taxes.
"These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India," said the agency, adding that one of the companies associated with Vivo that's also being investigated used forged documentation at the time of incorporation.
Vivo told TechCrunch it’s cooperating with Indian authorities on the investigation.
The Chinese embassy in India, meanwhile, criticised the move in a statement, stressing how frequent investigations disrupt normal operations as well as “impedes the improvement of business environment in India”. It also warns that such moves could only discourage foreign investors, including Chinese entities, from investing in the country.
Wang Xiaojian, the spokesperson of the Chinese Embassy in India noted that China is keeping a close eye on how the situation unfolds.
Previously, Xiaomi, another Chinese smartphone maker, faced a similar investigation, having been accused by the same agency of violating foreign exchange laws. The ED reportedly seized over US$725 from the company's Indian offices. Its executives, who challenged the ruling during the investigation, were said to have been threatened with "physical violence".
There have long been tensions between China and India, with the two neighbouring superpowers seemingly being caught in border disputes for years now. But the situation seems to have gotten worse in 2020 when a skirmish broke out between the country's forces at the border. Since then, India appears to have taken a strong stance in restricting Chinese entities from conducting business in the country.
Chinese smartphone maker Vivo has seemingly found itself in the crosshairs of the Indian government, having been accused of tax fraud by the country’s anti-money-laundering agency.
The Enforcement Directorate (ED), the agency handling the case, seized a total of 4.65 billion rupees in 48 separate raids.
The agency alleges that Vivo remitted 624.76 billion rupees outside of India to avoid paying taxes.
Vivo said it's cooperating with Indian authorities on the investigation.