A Chinese national working for the smartphone manufacturer Vivo is in custody along with 3 other industry executives. The four people were arrested by India’s financial crime agency on allegations of money laundering.
It was first reported that four Chinese nationals working for Vivo had been arrested. However, Reuters confirmed that only one Chinese suspect by the name of Guanwen Kuang was arrested. The Chinese national was present during a court hearing yesterday. The nationality of the other 3 is not confirmed.
Vivo has promised to explore all legal channels. The company said in a statement ” The recent arrest deeply concerns us. We will exercise all available legal options”
India’s Enforcement Directorate (ED), has been carrying out investigations on money laundering since last year. Previously, the ED had carried out raids on Vivo’s offices in India. ED had in the same year blocked 199 bank accounts associated with Vivo. However, a court rescinded this move.
The Chinese tech company is owned by BBK Electronics. It has always maintained its stance of innocence in the matter. Vivo stated it has provided the Indian authorities with all information requested. Further, the company has stressed that it is fully compliant with the laws.
Vivo Woes Part of India-China Rivalry
In August, Indian police formally accused both Vivo and Xiaomi of aiding illegal money transfers. The Chinese smartphone makers were accused of transferring money to a news portal that is currently under investigation.
The news portal by the name NewsClick is accused of spreading Chinese propaganda and conspiring to disrupt India’s sovereignty. India police accuse the news site of using the funds received to push biased news attacking Indian policies and regulations.
“It is further learnt that big Chinese Telecom companies like Xiaomi, Vivo, etc. incorporated thousands of shell companies in India in violation” of India’s foreign currency laws “for illegally infusing foreign funds in India in furtherance of this conspiracy,” stated the police.
Vivo is one of the biggest phone brands in India. As of Q2 2023, the company is the second largest smartphone brand with a market share of 17%.
Vivo’s woes are part of the continuing diplomatic battles between India and China. In the past, India has banned several Chinese Apps including TikTok. The Country cited security concerns as the reason to ban the apps.