Both the Enforcement Directorate and Vivo India are heading against head others at the Delhi High Court after the former found out about money laundering schemes. ED has tagged Vivo India for conducting a heinous economic offense and froze all its bank accounts thereby paralyzing it from doing daily business operations in India.
Vivo India vs Enforcement Directorate (ED)
According to an affidavit filed by the ED, some of the employees working at Vivo India and some Chinese nationals failed to cooperate with ED’s proceedings. These employees tried to abscond, remove or hide digital devices that were later retrieved by the concerned search teams. ED has now frozen the bank accounts of Vivo India aka the petitioner and took it to the Delhi High Court that it followed a due process of law to complete these transactions. ED has tagged Vivo India with Article 19(1)(g) of the constitution.
The Delhi HC recently allowed Vivo Mobile to conduct its businesses and operate using the bank accounts after submitting a bank guarantee of 950 crores. It ignited VIVO who filed a petition challenging ED’s move towards freezing bank accounts. For now, ED will have to respond with its take on the matter at the next hearing scheduled on July 28.
Circling back to the Delhi HC allowances of bank accounts, it has asked Vivo to submit a bank guarantee of Rs 950 crore while maintaining a Rs 251 crore minimum balance in the account. Vivo has seven days to submit the BG. Vivo India argued that no company can run with an operational bank account.
ED mentioned that even though the suspected amount that it thinks Vivo India has laundered is Rs 1200 crores to its associate company GPICPL, they have frozen only Rs 251 crore.
Vivo India’s Senior Advocate Siddharth Luthra mentioned that 9,000 employees are working at the company which makes it a liability. Also, the nine frozen bank accounts are used to pay up for employee salaries, custom duties, and statutory dues to the competent authorities. Not getting to pay these components would make Vivo India liable legally further.
There are also allegations around Vivo India remitting the amount to other companies. Apparently, Vivo India had total sale proceeds of Rs 1,25,185 crores of which, it remitted 50 percent or Rs 62,476 crore of its turnover out of the country and mainly to China. It remains to be seen what happens next so stay tuned for more updates.
A complained was field across Vivo India’s associated comapny GPICPL after its directors flew out of India. GPICPL was incorporated by Zhang Jie, Bni Lou, and Zhengshen Ou where Lou left India on April 26, 2018, followed by the other two in 2021.