India accuses China's Vivo of visa violations, siphoning off $13 billion

Many employees of Chinese smartphone maker Vivo and its Indian affiliates concealed their employment when seeking visas, and some breached rules by visiting the "sensitive" Himalayan region of Jammu and Kashmir, India's financial crime agency has said.

The court statement comes as tension rises with Beijing over business activities after New Delhi tightened curbs on incoming investment and banned hundreds of Chinese apps following border clashes in 2020 that killed 20 Indian and four Chinese troops.

The accusations, detailed on Tuesday in a court filing that is not public, follow the arrest this week of a Vivo executive, Guangwen Kuang, in a money laundering investigation launched in 2022 into India's second biggest smartphone player.

At least 30 Chinese individuals entered India on business visas and worked as Vivo employees, but their application forms "never disclosed" that the firm was their employer, the agency, the Enforcement Directorate, said in the 32-page filing. "Various Chinese nationals have been traveling across India, including sensitive places of Jammu and Kashmir and Ladakh, in gross violation of Indian visa conditions," it added, shedding light for the first time on the alleged offences.

"Many employees of Vivo group companies worked in India without appropriate visas," the agency said in the filing.

"They have concealed information regarding their employer in their visa applications and cheated the Indian embassy or missions in China."

Asked for comment, Vivo, which has a market share of 17%, reiterated a statement from earlier this week that said the executive's arrest "deeply concerns us", while adding that it remained "dedicated to legal compliance".

China's foreign ministry, which said this week it was closely following the case, did not respond to a Reuters request for comment.

The Indian embassy in Beijing and the foreign ministry in New Delhi also did not respond.

In their decades-old border dispute, both India and China claim large tracts of land controlled by the other in the western Himalayas.

India bars foreigners from entering or staying in the areas of Ladakh and parts of Jammu and Kashmir it has designated as "protected", unless they have a permit from the authorities - a document that is separate from a visa.

Last year, the agency raided 48 sites linked to Vivo and its associates in the money laundering investigation, accusing the company of illegally siphoning money to China to evade Indian taxes through companies it indirectly controls.

This week's court filing says 1.07 trillion rupees ($12.87 billion) was remitted outside India by Vivo to some trading companies controlled by its Chinese parent, in what the agency called a "masking layer" intended to escape government notice.

"While no profits were shown from 2014-15 to 2019-20 in the statutory filings and no income taxes were paid ... huge sums were siphoned off out of India," the Enforcement Directorate added.

In July last year, the agency estimated a figure of 624.7 billion rupees ($7.5 billion) had been remitted mainly to China.