India Arrests China Phone-Maker Vivo Execs in Tax Ruse Probe

India’s financial crime agency arrested four executives from Chinese smartphone maker Vivo on Tuesday, including one Chinese national, sources said.

The arrests add to the legal troubles of the Chinese phone maker in India, and come amid rising tensions between Beijing and New Delhi over issues ranging from border disputes to India’s increasing scrutiny of Chinese businesses and investment.

The executives were arrested in relation to an ongoing 2022 case when the Enforcement Directorate (ED) raided the company’s offices and accused it of money laundering, the first of the sources said.

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The company has repeatedly denied the allegations. It has previously said it cooperated with authorities to provide them with all required information and was “committed to be fully compliant with laws”.

Vivo is owned by China’s BBK Electronics, which also operates brands such as Oppo and Realme in India. Vivo is the second biggest smartphone brand in India with a 17% market share in shipments, trailing behind Samsung, according to data from research firm Counterpoint.

The first source said Vivo executives were summoned to the ED’s Delhi office for questioning, and then arrested. They will appear in court later on Tuesday, the person added.

In 2022, the ED blocked 119 bank accounts linked to Vivo’s India business, but a court later revoked the move. In the case, the ED alleged Vivo India transferred 624 billion rupees ($7.5 billion) to China illegally to “disclose huge losses” in India to avoid payment of taxes.

India-China Relation at Low Point

Indian police also have formally accused Vivo of helping transfer funds illegally to a news portal under investigation on charges of spreading Chinese propaganda, Reuters reported last week. Vivo hasn’t commented on the matter.

Relations between India and China have increasingly soured since a 2020 military clash on their disputed Himalayan border in which 20 Indian soldiers and four Chinese troops were killed.

Since then, India has banned hundreds of Chinese apps including TikTok, citing national security concerns and tightened scrutiny of incoming investments from its neighbour.

Recently, carmaker BYD’s proposal to invest $1 billion to build electric cars and batteries in India faced increased scrutiny from New Delhi, forcing the EV maker to drop its plans.

• Reuters with additional editing by Sean O’Meara

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