Vivo denies allegations of financial terrorism and money laundering

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In contrast, it has “contributed considerably towards the financial integrity and economic stability” of India, according to the local branch of Chinese mobile phone manufacturer Vivo, which denied money laundering and financial terrorism allegations in a statement to the Delhi High Court. Vivo India was accused of money laundering in an effort to disrupt India’s financial system, according to the Directorate of Enforcement (ED).

In an affidavit that it provided to the high court, the corporation refuted claims that it moved money to China in order to evade paying taxes in India. Remittances have a “legal basis and went towards the procurement of raw material and other services required for the mobile manufacturing operations of the company,” according to the statement.

The company claimed in an affidavit obtained by ET that it “purchases and imports certain components and raw materials from China for the manufacturing of its products, and duly remits payments for the same to its suppliers.” Motherboards, semiconductors, printed circuit boards, and sensors are among the parts imported from China, according to the statement.

Importantly, the company stated that it was building a new manufacturing facility in India and that it was sourcing services for that facility from China in the areas of consulting, market research, architecture, and R&D.

The business claimed that during its search activities on July 5, the ED had taken data and documents that belonged to the business. According to Vivo India’s affidavit, “These include the underlying documents for all the company’s activities, including the transactions with respect to China.”

The alleged laundering “has been carried out as an attempt to destabilise the financial system of the country and to also challenge the integrity and sovereignty of the nation,” the ED claimed in its affidavit to the high court, as first reported by ET on Sunday. The organisation had highlighted a judgement from the Orissa High Court from 2020 that referred to money laundering as a form of “financial terrorism.”

This citation, according to Vivo India, was “just an unfortunate attempt to spread fear and mistrust about the company.”

The company employs 9,000 people in India, and it has offered to invest Rs 6,090 crore in Uttar Pradesh. As a result of the ED’s bank account suspension on July 5, Vivo India has been unable to use its legal money, and the company’s operations are progressively heading for “certain civil and commercial death,” according to the affidavit. The freezing of the account was “illegal, without authority, and bad in law,” it was noted.

ED has not complied with the Prevention of Money Laundering Act’s (PMLA) standards. The business claimed that the “ED has acted without jurisdiction and abused its authority.” ED acted arbitrarily, illegally, and outside of its authority.

Vivo India said that because the information about its bank account was public knowledge, the freezing “without any investigation or adjudication with regard to the monies deposited within is excessive.” According to the corporation, its bank accounts cannot automatically be classified as proceeds of crime.


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