China is backing its businesses in safeguarding their lawful rights and interests, the Ministry of Foreign Affairs said following news that two more senior executives of the Chinese smartphone maker Vivo had been arrested in India as part of a money-laundering probe.
“We are closely following” the incident, ministry spokesperson Mao Ning said in a regular news briefing on Monday in response to a question. “The Chinese Embassy and consulates in India will continue to provide consular protection and assistance to the individuals concerned in accordance with the law.”
Indian media reported Friday that the Enforcement Directorate, India’s financial crime-fighting agency, had arrested two senior employees working for Vivo’s India unit.
According to The Hindu, an Indian newspaper, the detainees are the interim CEO of Vivo India — a Chinese national — and its chief financial officer.
“We hope that India will fully recognize the mutually beneficial nature of the business cooperation between our two countries and provide a fair, just, transparent and nondiscriminatory business environment,” said Mao.
A Vivo spokesperson in India said the company was “deeply alarmed” by the action. “The recent arrests demonstrate continued harassment, and as such induce an environment of uncertainty amongst the wider industry landscape,” said the person. “We are resolute in using all legal avenues to address and challenge these accusations.”
Vivo’s China headquarters didn’t reply to Caixin’s question about the matter.
Guangdong province-based Vivo, the second-largest smartphone brand in India, after South Korea’s Samsung, has faced growing headwinds for its operations in the country as New Delhi hardens its stance on Chinese tech firms. The latest arrests come two months after the Enforcement Directorate detained four executives, including one Chinese national, related to Vivo on alleged links to a money laundering investigation targeting the company.
The October detention was part of an anti-money laundering crackdown related to Vivo, according to the directorate, which is affiliated with India’s Ministry of Finance. In July 2022, the directorate raided 44 offices of Vivo and associated entities in multiple states, including Uttar Pradesh, Meghalaya and Maharashtra, over suspected violations of the Prevention of Money Laundering Act.
After the raids on Vivo, India’s Directorate of Revenue Intelligence, affiliated with the Ministry of Finance, said it had found evidence that Vivo India had willfully and wrongly described certain imported components used to make mobile phones to dodge import duties totaling 22.2 billion rupees ($266 million).
Vivo entered the Indian market in 2014 and opened a factory a year later in Greater Noida, Uttar Pradesh. It has an Indian sales and distribution network that in 2021 included more than 500 of its own stores and 70,000 third-party retailers. The company started exporting locally assembled phones in 2022, according to its India Impact Report 2021.
Vivo has localized its component supply chain in India, with 95% of the batteries in its phones coming from local suppliers, according to the report. The company aims for 60% of screens and 75% of chargers to be provided by local companies by next year.
In the 2023 second quarter, Vivo accounted for 17% of India’s smartphone market, only behind Samsung Electronics’ 18%. The company employs about 10,000 locally.
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