New Delhi/Hong Kong
CNN
—
An govt at Vivo, certainly one of China’s prime smartphone makers, has been arrested in India in reference to a cash laundering probe, elevating fears of a renewed crackdown on Chinese language companies within the nation.
Guangwen Kuang, the pinnacle of administration at Vivo India, was taken into custody on Tuesday by India’s Enforcement Directorate (ED), his lawyer, Mudit Jain, advised CNN. The ED is the nation’s fundamental monetary crimes investigation company, liable for probing cash laundering and violations of international alternate legal guidelines.
Kuang, a Chinese language nationwide, was arrested alongside three different folks and can be held in custody for 3 days, in line with a courtroom doc shared with CNN by Jain.
One of many different detainees was an individual who had helped Vivo arrange its places of work in India, and the opposite two have been accountants, in line with the doc.
In a press release to CNN, a Vivo spokesperson confirmed that one worker had been arrested and vowed that the corporate would “train all out there authorized choices.”
“The latest arrest deeply considerations us,” the consultant mentioned. “Vivo firmly adheres to its moral rules and stays devoted to authorized compliance.”
Allegations of cash laundering towards Vivo have been first made in July 2022, when the ED mentioned it had carried out searches at 48 Vivo areas within the nation and seized $60 million from the corporate’s financial institution accounts.
The company accused Vivo of tax fraud and mentioned the agency had remitted 624.8 billion rupees ($7.9 billion), principally to China.
“These remittances have been made with a purpose to disclose large losses in Indian included corporations to keep away from cost of taxes in India,” the ED mentioned on the time.
The corporate mentioned on the time that it was cooperating with the investigation.
The raids got here two months after India seized greater than $700 million from one other massive Chinese language smartphone maker, Xiaomi, which was additionally accused of transferring cash overseas illegally.
Xiaomi denied wrongdoing, saying all its operations have been “firmly compliant with native legal guidelines and laws.”
Xiaomi and Vivo are vastly in style with Indian shoppers, each rating within the prime three of the nation’s huge smartphone market behind Samsung.
Regardless of the regulatory crackdown, Vivo remains to be India’s second largest smartphone model, commanding 17% of the market within the second quarter, in line with Counterpoint Analysis.
Xiaomi, in the meantime, has seen its market share slip from 19% to fifteen% in the identical interval.
Relations between China and India soured considerably after a lethal conflict at their shared contested border in 2020. Authorities in India later banned Chinese language apps and subjected offers with Chinese language corporations to larger scrutiny.
Since then, tensions between India and China have continued to simmer.
Vivo’s troubles this week prompted a swift response in Chinese language media. State-run tabloid World Occasions accused India of “rising protectionism.”
The manager’s detainment seems to sign a “hardened crackdown on Chinese language corporations,” the outlet mentioned in a report Wednesday.
China’s embassy in India has beforehand warned that the probes of Chinese language corporations in India risked damaging its fame amongst international traders and have disrupted “regular enterprise actions.”
— Vedika Sud contributed to this report.
