Vivo Mobiles India Case: Why ED arrested Lava International's Hari Om Rai?

A Chinese national Bin Lou was the founding director in Vivo India, GPICPL (Grand Prospect International Communications) and other related entities, ED said, adding that these companies were presented to the public as part of the Vivo Group but allegedly had dummy directors and shareholders to conceal Vivo China's control.

Hari Om Rai and Rajan Malik are accused of assisting Vivo China in setting up this Chinese-controlled network in violation of FDI norms, as per the probe agency, which further informed the court that Labquest Engineering, owned by Rajan Malik, is alleged to have facilitated this by helping individuals from Vivo China arrange security deposits and office spaces in India. Additionally, Labquest Engineering is accused of allowing Lava International employees to execute lease deeds for office spaces.

Vivo Mobiles India is accused of remitting funds from India without showing profits in statutory filings from 2014-15 to 2019-20, with Vivo Mobile Communications China being responsible for the day-to-day business of Vivo India, as part of a well-crafted criminal conspiracy to circumvent legal compliances.

Vivo Mobiles India is further accused of transferring half of the sale proceeds, totaling Rs. 1,25,185 crores, to China in an attempt to evade taxes in India. Multiple companies were allegedly incorporated for the purpose of transferring funds to China.

Notably, the ED's investigation under the Prevention of Money Laundering Act (PMLA) began on February 3, 2022, and included searches at 48 locations, including the premises of Vivo Mobiles India and 23 associated companies. The probe agency conducted raids on October 9, and arrested the four executives Vivo Mobiles India, a day later on Tuesday, October 10.