India’s Enforcement Directorate (ED), an agency devoted to fighting financial crimes, has arrested four Vivo executives with connections to the Chinese smartphone manufacturer, including one Chinese-born national.
Tensions between India and China have been high since a military clash in 2020, and as a result India has increasingly cracked down on Chinese smartphone and mobile app companies, including the bans of games linked to Chinese companies such as Tencent which led to the creation of games such as BattleGrounds Mobile India in order to circumvent a Chinese connection.
Reuters reports that the arrests relate specifically to an ongoing money laundering case, which saw dozens of Vivo offices raided in July 2022, alongside Chinese peers Huawei and Xiaomi. While sources initially told the site that all four arrested executives worked for Vivo, lawyers later confirmed that only one of the executives, a Chinese national identified as Guanwen Kuang, was a Vivo employee.
The other defendants include Lava International managing director Hari Om Rai, who helped Vivo establish its business in India, and chartered accountant Nitin Garg.
Speaking to the South China Morning Post, a spokesman for Vivo stated that the company “firmly adheres to its ethical principles and remains dedicated to legal compliance.
“The recent arrest deeply concerns us. We will exercise all available legal options.”
A troubled history
Vivo currently holds an enviable place as India’s second biggest smartphone brand, with a market share of 17%. However, its business practices in China have long been a topic of scrutiny. Following the aforementioned raid of the company’s offices, 27,000 Vivo smartphones worth almost $15 million were seized at a New Delhi airport in December, preventing their export to neighbouring countries. The ED blocked 119 bank accounts related to the company, however this block was later revoked by an Indian court.
Indian authorities have also accused Vivo of helping transfer funds to a news portal being investigated for spreading Chinese propaganda, a claim it has yet to comment on.