The Enforcement Directorate (ED)recently raised a money laundering investigation into Chinese smartphone manufacturer Vivo and its affiliated firms. Searches were conducted in 44 locations in compliance with provisions of the Prevention of Money Laundering Act (PMLA). The action is part of the Union government’s steps to tighten checks on Chinese entities.
The federal agency filed a money laundering case after a recent Delhi Police FIR against a distributor based in Jammu and Kashmir. It was alleged that a few Chinese shareholders in that company forged their identity documents. The ED believes the this alleged forgery was done to launder unlawfully produced cash through shell or paper companies. Furthermore, a part of these “proceeds of crime” were shifted to avoid detection by Indian tax and enforcement agencies.
The IT department claims that income of more than Rs 500 crore was falsely declared. It is alleged that money was being misappropriated as royalty. The ED had earlier attached Xiaomi’s bank accounts worth Rs 5,000 crore. But the Karnataka High Court had stayed the move.