As part of an investigation into possible money laundering by the Chinese smartphone manufacturer, India’s financial crime bureau announced on Thursday that it had closed 119 bank accounts connected to Vivo’s India business that were holding 4.65 billion rupees ($58.76 million).
According to the Enforcement Directorate, 48 locations of Vivo and its 23 affiliated companies were seized this week on suspicion that sale revenues from Vivo India had been moved outside of the country in order to claim losses and evade taxes.
A query regarding the bank account block was not immediately answered by Vivo, which is owned by China’s BBK Electronics. Vivo stated earlier this week that it was dedicated to abiding by all Indian laws and that it was working with the authorities.
According to the press release from the agency, Vivo transferred nearly half of its total sales of 1,251.85 billion rupees ($15.82 billion) to China “in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India.”
After hearing about the raids, China’s embassy in India demanded a fair business environment for its enterprises, claiming that India’s numerous inquiries into Chinese companies were undermining their ability to invest and conduct business in the nation.
Following a border conflict in 2020, political unrest increased, making it difficult for many Chinese companies like Vivo and Xiaomi to conduct business in India.
Since then, India has banned more than 300 Chinese apps and tightened regulations on Chinese investment, citing security concerns. According to Counterpoint Research, Vivo has a 15% market share and is one of India’s top smartphone manufacturers. The market leader Xiaomi Corp. has a 24 percent market share, followed by Samsung Electronics of South Korea with an 18 percent share.
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