The Delhi high court has heeded Vivo’s plea to access its funds.
On July 5, India’s anti-money laundering agency, the enforcement directorate, froze all of the Chinese smartphone maker’s bank accounts in the country. Listing ten of those accounts, Vivo argued that the agency’s move had rendered it incapable of meeting its monthly dues of more than 2,826 crore rupees ($355 million). These include statutory ones like customs duties and goods and services tax (GST), salaries of 9,000 employees, and rent.
The high court yesterday (July 13) lifted the freeze on the condition that Vivo provides a bank guarantee of Rs950 crore ($119 million), a lawyer for the company told Reuters. The company has seven working days for this. It must also maintain a minimum balance of Rs250 crore in its accounts.
Why were Vivo’s bank accounts frozen?
The enforcement directorate’s investigation has supposedly revealed that Vivo remitted nearly 50% of its Indian turnover to other countries, especially China, to disclose huge losses and evade taxes. The Chinese company’s crimes could surpass Rs1,200 crore, the agency has said. The agency had raided 44 locations associated with Vivo across in 22 Indian states, besides blocking 119 of its accounts.
Amid a growing crackdown on Chinese goods and services in the recent past, China has urged that India’s probe be “non-discriminatory.”
The next hearing is on July 28.