New Delhi [India]: Enforcement Directorate has filed its main Prosecution Complaint (Chargesheet) in connection with a Prevention of Money Laundering Act (PMLA) case connected to the Chinese mobile phone company Vivo in Delhi’s Patiala House Court.
The chargesheet was filed against Chinese national Guangwen Kuang, Andrew, the MD of Lava International Hariom Rai, and two other individuals Nitin Garg and Rajan Malik under various sections of the Money Laundering Act.
All the accused in the matter are presently in judicial custody.
According to sources, the ED has also named VIVO company as an accused in the matter for allegedly cheating the Government of India. It stated that the company has set up an intricate network in the country.
Recently a trial court has issued a fresh notice to the jail superintendent with directions to file a medical status report on the cardiology and gastroenterology of Hari Om Rai, the Managing Director of Lava International.
Hari Om Rai was also arrested by the Enforcement Directorate along with other accused in connection with a Prevention of Money Laundering Act (PMLA) case related to the Chinese mobile company Vivo.
Rai who has recently filed a bail petition in trial court citing medical grounds has in his plea stated that the allegations made against him were false and absurd. He stated that he has no direct or indirect control over Vivo’s business, nor has he derived any monetary benefit, or engaged in any transaction with Vivo or any entity allegedly related to Vivo, let alone having been associated with any alleged ‘proceeds of crime’.
He further explained that since Vivo China wanted to enter India, the applicant, Hariom Rai met with Shen Wei, CEO of Vivo China, in 2013. At that time, Vivo and the applicant/LAVA were contemplating a joint venture where 25 per cent shares would be held by the applicant/LAVA.
However, this eventually never fructified and Vivo decided to conduct its business in India.
The plea further stated that negotiations and business talks between the applicant and the representatives of Vivo China failed and did not meet a fruitful end due to which the applicant stopped pursuing the said opportunity and had nothing to do with Vivo China and/or its representatives after 2014.
Merely because, over the years, the international relations between India and China have deteriorated, it would not mean that the applicant committed an offence at the relevant time when there were, in fact, friendly business relations between the two countries.
According to the ED, certain Chinese shareholders of Grand Prospect International Communication Private Ltd. incorporated the company based on forged identification documents and falsified addresses.
During the inquiry, certain fraudulent activities were found by the Ministry of Corporate Affairs. The said company was not reported as a subsidiary of Vivo in the official records, whereas the said company publicly projects itself to be a subsidiary of Vivo, said ED.
ED further alleged that Director and Share Holder Zhang Jie used a false driving licence to apply for a Director Identification Number (DIN) for giving his Shillong address and also used his fake driving licence to open the bank account.
With the allegations of cheating, an FIR in Police Station Kalkaji, South East Delhi, was registered under Section 417/120B/420 IPC and another FIR was also registered under Section 417/420/468/471/120B IPC by the Economic Offence Wing, Delhi Police, based on the complaint filed by Manjit Singh, the then Deputy Registrar of Companies in the Union Ministry of Corporate Affairs.
ED further alleged that soon after the incorporation of Vivo, India, 19 more companies, including GPICPL, were incorporated across India, completely controlled by Chinese nationals. The accused, Bin Luo, was the founder and first director of Vivo India, GPICPL and all other 18 entities at the time of their incorporation and the accused, Nitin Garg, had assisted in the incorporation of most of the companies of Vivo Group.
According to the Enforcement Directorate, raids were conducted on the premises of the accused on October 9 and seized cash amounting to more than Rs 10 lakh and arrested four accused, who have been identified as Guangwen Kyang, also known as Andrew Kuang, the Chinese national, Hari Om Rai, the MD of Lava International, Rajan Malik, and Nitin Garg a Chartered Accountant.
The probe revealed that the PMLA investigation by ED was initiated by registering a money laundering case on February 3, 2022.
