Why Chinese companies and ED don’t see eye to eye

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The Chinese company Vivo appealed the suspension of its bank accounts, and the high court on Friday urged ED to answer. Following Xiaomi, another Chinese smartphone maker, Vivo India, has taken the Enforcement Directorate (ED), the country’s top law enforcement body, to the Delhi high court over an alleged money laundering case.

 The high court ordered ED to respond to Vivo’s appeal against the freezing of its bank accounts and to make a decision on the company’s request for permission to operate the accounts within a week on Friday. According to an ED statement, “Vivo India sent 62,476 crores, which is about 50% of the turnover out of India, primarily to China, out of the total selling revenues of 1,25, 185 crores.” According to claims that the sale proceeds of India’s arm were transferred outside of the country in order to claim losses and evade taxes, the ED launched search and seizure operations across 48 locations of Vivo and 23 connected organizations on Thursday. Large sums of money were discovered to have been sent to Vivo India by these 23 companies.

According to an ED statement, “Vivo India sent 62,476 crores, which is about 50% of the turnover out of India, primarily to China, out of the total selling revenues of 1,25, 185 crores.” According to the ED, certain Chinese nationals who worked with Vivo India “did not assist with the search operations and had attempted to escape, remove, and conceal digital devices that were gathered by the search teams.” Vivo said in the petition that the ED’s decision will result in “severe unfairness” to the corporation. Additionally, the petitioner claimed that the freezing of the bank accounts will negatively impact its operations in India and elsewhere in the world and impede any current or upcoming business operations it performs through these bank accounts.

Xiaomi probe The Enforcement Directorate conducted a similar inquiry against Xiaomi India in April, and as a result, it seized roughly 5, 551 crores from the business under the terms of the Foreign Exchange Management Act 1999. By delaying the seizure orders from April 29, the high court provided the company with some respite. The company claimed in the petition that the agency had threatened senior executives Manu Kumar Jain, the former managing director of Xiaomi India, and Sameer Rao, the chief financial officer of the company in India, as well as their respective families, with grave consequences, including arrest, harm to their professional prospects, criminal liability, and physical violence.

 However, ED flatly denied and labelled as “baseless” all of the assertions made by the Chinese company. In addition to creating a fair, just, and non-discriminatory business environment for Chinese enterprises to operate and invest in India, China wants the Indian side to conduct investigations and enforce the law in accordance with laws and regulations.

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