ED arrests 4 in case against Chinese phone-maker Vivo

The ED Tuesday arrested four persons including the managing director of Lava International mobile company and a Chinese national in connection with a money-laundering probe against smart phone-maker Vivo, with sources terming their activities detrimental to India's economic sovereignty.The Enforcement Directorate (ED) claimed in its remand papers before a local court that the alleged activities of the four enabled Vivo, India to make wrongful gains.They four arrested were identified as Hari Om Rai, the MD of Lava International company, Chinese national Guangwen alias Andrew Kuang, and Chartered Accountants Nitin Garg and Rajan Malik.
They have been taken into custody under the provisions of the Prevention of Money Laundering Act (PMLA).The agency told the court that Rai, "in collusion" with the three others "enabled Vivo, China to fraudulently establish a complex centrally controlled structure all over the country under the corporate veil of Vivo, India in circumvention of the extant FDI norms and by concealing the true nature of their ownership and control, by using forged identity cards.Thus, they cheated the government authorities and in the process enabled Vivo, India (controlled by Vivo, China) acquire huge wrongful gains for themselves to the "detriment of economic sovereignty of the country", the ED said.The four were produced in a court here which sent them to three-day Enforcement Directorate custody. Additional Sessions Judge Devender Kumar Jangala passed the order on an application moved by the ED.
"I am of the considered opinion that the custody remand of the accused persons Hari Om Rai, Nitin Garg, Rajan Malik and Guangwen Kuang is necessary. Accused persons… are accordingly remanded to ED custody till October 13," the judge said.The application was opposed by Advocate Nitesh Rana, appearing for the accused, who claimed the allegation were false and that the ED lacked evidence.An e-mail sent to Lava International, a domestic mobile device manufacturing company, for its reaction did not elicit an immediate response. Lava International claims to have 1-2 per cent share in the smartphone market. A Vivo spokesperson said 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".