Monday, December 5, 2022
HomeDigit NewsBig relief to Vivo, HC lifts ban on bank accounts, will have...

Big relief to Vivo, HC lifts ban on bank accounts, will have to give bank guarantee of Rs 950 crore

The Enforcement Directorate of India (ED) last week took action against Chinese smartphone company Vivo and seized hundreds of crores of rupees from several of its bank accounts. Vivo is alleged to have ‘illegally’ transferred Rs 62,476 crore to China to avoid paying taxes in India. After the matter came to light, the ED had frozen the bank accounts of Vivo India. On Wednesday, the High Court lifted the ban on Vivo’s bank accounts. The court has ordered a bank guarantee of $119 million (about Rs 950 crore) to the Chinese company.

Reuters has reported in its report that Vivo India, in a filing to the Delhi High Court, had said that the ban was affecting its business and it would not be able to pay dues and salary. In this filing, 10 bank accounts were listed and the need for monthly payments of Rs 2826 crore was stated. Accepting the arguments of Vivo, the court has given relief with conditions.

The ED had said last week that it has blocked funds worth Rs 465 crore in 119 bank accounts linked to Vivo India and its associates. Money laundering was cited behind this by the ED. The court had given the ED time till July 13 to take a decision on lifting the ban on bank accounts. On behalf of Vivo, it has been said that it is cooperating with the authorities in this matter and is committed to fully comply with Indian laws.

The action on Vivo was taken after the investigating agency came to know that three Chinese nationals and another person involved 23 companies in India. It is said that all Chinese citizens have left India during the year 2018 to 21. They have been identified as Bin Lu, Zhengshen Ou and Zhang Ji. Bin Lu is said to be the ex-director of Vivo. He left India in 2018, while the remaining two citizens left the country in 2021.

The ED had said that these (23) companies transferred huge amounts of funds to Vivo India. Vivo India shipped Rs 62,476 crore or nearly 50 per cent of the turnover outside India, mainly to China, out of the total sales proceeds of Rs 1,25,185 crore. This allegation on Vivo has hurt its reputation. This company holds a significant market share in India. Counterpoint’s research says that Vivo is at number two in the smartphone market in India with a market share of 15 per cent. Xiaomi is on the first position and Samsung on the third.

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