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After ED raids, Vivo moves HC against freezing of bank accounts

After ED raids, Vivo moves HC against freezing of bank accounts

The Enforcement Directorate (ED) conducted raids against Vivo and related firms in a money-laundering probe. The ED has alleged that Vivo has remitted 50% of revenue worth Rs 62,476 cr to avoid Indian taxes.

The ED conducted raids at 44 places across Delhi, UP, Meghalaya and Maharashtra, on July 5, that are related to Vivo and associated firms. The ED conducted raids at 44 places across Delhi, UP, Meghalaya and Maharashtra, on July 5, that are related to Vivo and associated firms.

Vivo India has moved Delhi High Court against the freezing of all its bank accounts.

The company in its appeal said that more than Rs 2,826 cr of monthly payments including employee salaries, office rents, bank financing payments, and other expenditures are on hold because its bank accounts have been frozen. 

Vivo added that custom duties, GST payments, also cannot be made by the company since the accounts cannot be accessed. 

The company has also alleged that the leak of news related to the Enforcement Directorate (ED) raids on its offices and related firms has caused “irreparable damage to market goodwill” and has caused “reputational and financial loss”. Vivo said that the ED acted without evidence and that the PMLA (Prevention of Money Laundering Act) investigation against it was started without any scheduled offence. 

The plea filed by Vivo requests that the ED order to freeze the company bank accounts be set aside and permission be given to carry on business. 

The ED conducted raids at 44 places across Delhi, UP, Meghalaya and Maharashtra, on July 5, that are related to Vivo and associated firms. A case of money laundering was filed against Vivo after the ED took cognisance of a recent FIR filed under Delhi Police’s economic offences wing against a distributor of the company based in Jammu and Kashmir. The FIR alleged that some of Vivo’s Chinese shareholders had forged their identity documents. 

The ED suspected that the forgery was done to launder illegally generated funds using shell companies and alleged that some of the money was diverted abroad, or put in some other business, by skirting Indian tax and enforcement agencies. 

ED also widened its investigations to cover two charted accountants and a company secretary on July 7.  The ED probe revealed that Vivo’s Indian unit had transferred nearly Rs 62,000 cr to its parent entities in China over a five-year period beginning 2017 and up to 2021. 

Sources have earlier told Business Today that the ED investigation unearthed data that suggests that the total turnover of Vivo India between 2017 and 2021 was nearly Rs 1.25 lakh crore. 

Also Read: EXCLUSIVE: ED probes Rs 62,000 cr fund transfer to Vivo India’s Chinese parent

Also Read: Vivo remitted 50% of revenue worth Rs 62,476 cr to avoid Indian taxes: ED