The Indian government has decided to take a comprehensive and stricter crack down on multiple Chinese firms operating in India including ZTE Corporation. This is due to the fact that many Chinese companies including Vivo has been accused of financial misconduct which has been reported by several new outlets recently including Bloomberg. These companies are now targeted by the Indian government after Xiaomi India was fined recently for a similar reason.
The Ministry for Corporate Affairs is set to launch a comprehensive audit on these companies after they were informed by unknown sources that the companies have potential taken part in illicit financial activities which includes fraud, according to some reports.
Last month, Vivo India was investigated by the Indian government to make sure if there really were irregularities in their financial reports and the company’s ownership. The books of ZTE were also investigated and they were asked to compile their findings and send it to the ministry.
The spokes people of both ZTE Corporation and Vivo have not come out to make a comment on this situation yet. The Ministry of Corporate Affairs has also not commented on these new events yet.
Over the past two years, the Indian Government has tightened their grip on Chinese companies operating in the country after the two armies locked horns in a deadly battle in the Himalayas. Close to 300 applications made by Chinese developers have since been banned in India including many famous ones like TikTok and Alibaba Shopping.
Just a few weeks ago, the agency that fights money laundering in the country seized all the accounts held by Xiaomi India as they allegedly went against foreign exchange rules and regulations, however that investigation has been put aside now after they were ordered to by the Supreme court.
The Ministry of Corporate Affairs is a governmental agency that ensures that companies are administered accordingly to the Companies Act of 2013 and the Companies Act of 1947. The agency was set up in the 1950s and its head office is situated in New Delhi.
The books of close to 600 Chinese companies will now be looked through comprehensively. Many other companies including Xioami, Oppo, and Huawei will also be investigated thoroughly although the status and other specifics of the investigations have not been revealed to the public.
The Chinese smartphone companies like Xiaomi and Oppo have found great success in India and will be looking to end this debacle quickly and get back to their operations as soon as possible.