Delhi High Court (HC) has lifted a freeze on Chinese smartphone maker Vivo’s bank accounts imposed by India’s financial crime agency and has ordered the company to provide a bank guarantee.
The court has allowed the de-freezing of Vivo’s bank accounts attached by the Enforcement Directorate (ED) and has asked the Chinese company to operate the bank account subject to furnishing a bank guarantee of ₹950 crore & also to maintain the balance of ₹250 crores. Further, the company will have to give the details of remittances to ED, as per the notice.
The ED had blocked nearly 119 bank accounts linked to Vivo’s India business and its associates that were holding ₹465 crores as part of a probe into alleged money laundering by the company.
The court granted one week to the ED to file its response to the petition and listed the matter for further hearing on July 28. This comes after Delhi HC had last week asked ED to consider unfreezing some of Vivo’s bank accounts to pay for its liabilities.
Vivo India sent a representation to the ED on July 7, two days after the smartphone manufacturer and 23 associated companies were raided by the central agency in a money-laundering investigation.
Before launching nationwide raids, the agency tasked with investigating money laundering and foreign exchange violations reached out to nine banks directing a debit freeze of all 10 bank accounts belonging to Vivo India.
On July 5, ED conducted raids at multiple locations across India in connection with the money laundering probe against Vivo.The agency had said that Vivo remitted about Rs 62,476 crore of its turnover to China between 2017 and 2021 to avoid paying taxes in India.
This was almost half of the Chinese company’s turnover of Rs 1.25 trillion, the ED said without stating the time period of the transaction.
The probe agency on July 5 had raided several places across the country in the money laundering investigation against Vivo and related firms.
The case
After the ED carried out surprise searches at Vivo’s premises earlier this month and froze all its bank accounts, the mobile manufacturer sought permission to operate its accounts to facilitate its statutory and obligatory payments.
On its request not being given an urgent consideration by the ED, the company approached the Delhi High Court with the same request and said if it was not allowed to make payments towards its customer obligations, salaries, taxes, and other statutory dues, it will face a commercial and civil death.
On an earlier occasion, the high court had asked the ED to consider Vivo’s request for permission to operate its accounts. However, with no development on that front, the high court granted a small breather to the company in its interim order today.
