India’s financial crimes agency on Tuesday arrested four industry executives, including a Chinese national working at Indian smartphone maker Vivo, on suspicion of money laundering, according to legal documents and lawyers handling the case.
The arrest adds to the Chinese phone maker’s legal troubles in India and comes amid rising tensions between Beijing and New Delhi, ranging from a border dispute to India’s growing scrutiny of Chinese companies and investments.
Vivo said in a statement that it “firmly adheres to its ethical principles and remains committed to complying with the law. The recent arrests deeply concern us. We will pursue all legal options available to us.”
India’s Enforcement Directorate (ED) did not immediately respond to a request for comment.
Earlier in the day, two sources told Reuters that four Vivo employees had been arrested, but at a court hearing before the executives, lawyers said only one Vivo employee, described in legal documents as Chinese citizen named Kuang Wenkuang.
Further details of the investigation were not immediately clear. ED’s lawyer Manish Jain sought 10 days’ detention for the arrested, but the judge ordered only three days’ detention.
The names and affiliations of the other three senior executives were unclear.
The first source said the top brass were arrested in connection with an ongoing case in 2022 in which the Ministry of Education raided Vivo’s offices and accused it of money laundering.
Vivo has repeatedly denied the accusations. The company has previously said it will cooperate with authorities by providing them with all required information and is “committed to full compliance with the law.”
Vivo is part of China’s BBK Electronics, which also operates brands like Oppo and Realme in India. According to data from research firm Counterpoint, Vivo is India’s second-largest smartphone brand, with a market share of 17% in shipments, behind Samsung.
In 2022, the ED froze 119 bank accounts related to Vivo’s India operations, but a court later reversed the measure.
Indian police have also formally accused Vivo of helping illegally transfer funds to a news portal that is under investigation for spreading Chinese propaganda, Reuters reported last week. Vivo has not yet commented on the matter.
Relations between India and China have worsened since a military clash on the disputed Himalayan border in 2020 that left 20 Indian and four Chinese soldiers dead.
India has since banned hundreds of Chinese apps, including TikTok, citing national security concerns and stepped up scrutiny of investments in its neighbor.
Automaker BYD’s recent proposal to invest $1 billion (about Rs 8,321 crore) to produce electric vehicles and batteries in India has come under closer scrutiny from New Delhi, forcing the automaker to abandon its plans, Reuters reported in July.
© Thomson Reuters 2023
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