Vivo Mobile case: ED arrests Lava International MD, three more for alleged money laundering

Vivo Mobile case: The Enforcement Directorate (ED) has arrested four people, including a Chinese national and the MD of Lava International in connection with its probe into an alleged money laundering case by Vivo India executives. As per reports, the agency has arrested four accused, including a Chinese national Guangwen Kyang aka Andrew Kuang; the MD of Lava International Hari Om Rai; Rajan Malik, and a Chartered Accountant (CA) Nitin Garg.

According to the detailed shared by the ED, Vivo Mobiles India Pvt Ltd was incorporated on August 1, 2014, as a subsidiary of Multi Accord Ltd, a Hong Kong based company and was registered at ROC Delhi. GPICPL was registered on December 3, 2014, at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhinagar, Jammu. “The said company was incorporated by Zhengshen Ou, Bin Lou and Zhang Jie with the help of Nitin Garg, CA. Bin Lou left India on April 26, 2018. Zhengshen Ou and Zhang Jie left India in 2021,” the financial probe agency wrote in its report.

As per the FIR filed by the Delhi Police, GPICPL and its shareholders had used forged identification documents and falsified addresses at the time of incorporation. The allegations were found to be true as the investigation revealed that the addresses mentioned by the directors of GPICPL did not belong to them, but in fact it was a government building and house of a senior bureaucrat.

ED has arrested four accused in Vivo Mobile case.

1.Guangwen Kyang @Andrew Kuang, Chinese National
2. Hari Om Rai, MD of Lava International.
3. Rajan Malik,
4. Nitin Garg, CA Arrested.

Details and Background 👇🏼 pic.twitter.com/Am0l3lNc5j

— Jitender Sharma (@capt_ivane) October 10, 2023

ED’s probe also revealed that GPICPL director, Bin Lou, was also an ex-director of Vivo and that he had incorporated a total of 18 companies across the country around the same time, that is, after the incorporation of Vivo India in 2014-15. The Chinese Nation Zhixin Wei, on the other hand, incorporated four companies across the country. In its probe, ED found that these companies transferred huge amounts of funds from Vivo India to China. The agency also found out that the company made remittances by declaring huge losses in India.

“These companies are found to have transferred huge amount of funds to Vivo India. Further, out of the total sale proceeds of Rs 1,25,185 crores, Vivo India remitted Rs 62,476 crores, i.e. almost 50 percent of the turnover out of India, mainly to China,” ED wrote in its report.

“These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India,” ED added in its probe.

It is worth noting that ED’s action comes almost more than a year after it carried out searches at 48 locations across the country belonging to vivo Mobiles India Private Limited and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL).

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