PMLA case: Vivo India interim CEO, two others sent to 3-day ED custody

New Delhi: In a money laundering case against the Chinese smartphone manufacturer Vivo, a Delhi court has sent three recently arrested top executives to three days in prison. Following their three days of detention by the Enforcement Directorate (ED), the three accused—Vivo India interim CEO Hong Xuquan, Vivo chief financial officer (CFO) Harinder Dahiya and consultant Hemant Munjal —will now appear before the court on December 26.

The arrests were made in the case months after the four accused -- Lava International MD Hari Om Rai, Chinese national Guangwen alias Andrew Kuang, Chartered Accountants Nitin Garg and Rajan Malik -- were arrested on October 10.

A Vivo spokesperson said: "We are deeply alarmed by the current action of the authorities. The recent arrests demonstrate continued harassment and as such induce an environment of uncertainty amongst the wider industry landscape. We are resolute in using all legal avenues to address and challenge these accusations."

On December 20, the court took cognisance of the charge sheet filed by the financial probe agency naming the four accused in it. Special Judge Kiran Gupta of Patiala House Courts summoned the accused, who are in judicial custody, on February 19, 2024. The Delhi High Court, recently, also dismissed the habeas corpus petitions of three individuals who are accused in a money laundering case related to Vivo.

The petitioners argued that their continued detention in Tihar jail was illegal due to the absence of a court order extending their judicial custody beyond December 7. The ED countered, explaining that a charge sheet was filed on December 6, and the accused were produced via video conference on December 7.

The court was informed that due to a transfer, the accused were not physically brought before ASJ-04, who then adjourned the case and issued production warrants. After examining the facts, Justices Suresh Kumar Kait and Shalinder Kaur concluded that there was no break in the custody of the accused, as the trial court had issued production warrants to ensure their presence on December 13, indicating lawful judicial custody.

The court upheld the ED's stance, saying that the legal representatives of the accused were present, and no objections were raised during the issuance of production warrants. It clarified that continuous custody is maintained when a legitimate reason prevents physical appearance, as in this case.

The court had earlier noted that the probe agency was able to make out the case for the grant of further custody.

"There appears to be continuity in the stand taken by the ED about the extraction of digital data and the accused persons to be confronted with the same. Therefore, considering the settled principles of law and Delhi High Court Rules, I am of the considered opinion that the ED can make out the case for grant of further custody remand,” the judge had said, IANS reported.

In response to the ED's allegation that there has been recovery of several incriminating documents, a counsel for Guangwen had argued, "The nature of such documents has not been specified and why these are relevant to the investigation was not apprised or substantiated by the ED. It was only submitted that they relate to the incorporation of companies which is not an offence."

Earlier, a source said that the arrests were made after the financial probe agency carried out searches at the premises of the four accused and recovered cash to the tune of Rs 10 lakh. The ED action came more than a year after it carried out searches at 48 locations across the country belonging to Vivo Mobiles India Private Ltd and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL) and claimed that it has busted a major money laundering racket involving Chinese nationals and multiple Indian firms.

According to the ED, Vivo Mobiles India Pvt Ltd was incorporated on August 1, 2014, as a subsidiary of Multi Accord Ltd, a Hong Kong-based company, and was registered at ROC Delhi. GPICPL was registered on December 3, 2014, at ROC Shimla, with registered addresses of Solan, Himachal Pradesh, and Gandhi Nagar, Jammu.

The PMLA investigation by ED was initiated by registering a money laundering case on February 3, 2022, based on an FIR registered at the Kalkaji police station in the national Capital by Delhi Police against the GPICPL, its director, shareholders and certifying professionals etc., based on a complaint filed by the Ministry of Corporate Affairs.