Tag: ed

The Delhi High Court has asked Chinese smartphone maker Vivo to approach the PMLA Appellate Tribunal in relation to the freezing of its bank accounts pursuant to a money laundering probe by the Enforcement Directorate.

Justice Prathiba M Singh asked Vivo, which has already filed an appeal before the tribunal, to file a plea there itself for interim relief and clarified that until a decision, interim or final, is taken by the tribunal, the high court’s earlier orders asking the company to furnish bank guarantee of Rs. 950 crore and to maintain the credit balance of over Rs. 251 crore to be able to use the bank accounts shall continue.

The proceedings on interim applications as also the final adjudication may be conducted expeditiously before the Appellate Tribunal within four weeks either from filing of the appeal or from first listing of the appeal along with the interim applications, added the court.

“The interim arrangements, which have been directed by this Court … shall continue till the time the Appellate Tribunal decides the interim applications or till the final decision in the Appeals, in terms of the orders that may be passed by the Tribunal,” the court said in its order passed on March 28.

Justice Singh observed that since the initial debit freeze orders have now merged with a final order of the Adjudicating Authority in December 2022, it is deemed appropriate to relegate Vivo to pursue the remedies before the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA).

The court passed the same order on the petition by Grand Prospect International Communication, a Vivo distributor facing the probe, as well.

Vivo had approached the high court last year for quashing of the orders freezing its bank account. It also sought permission to deal with the frozen bank accounts for making payments towards certain liabilities.

The ED has filed the money laundering case after taking cognisance of an FIR of Delhi Police’s Economic Offences Wing against a distributor of an agency based in Jammu and Kashmir where it was alleged that a few Chinese shareholders in that company forged their identity documents.

The ED suspected the alleged forgery was done to launder illegally generated funds using shell or paper companies and some of these “proceeds of crime” were diverted to stay under the radar of Indian tax and enforcement agencies.

The probe agency had earlier raided several places across the country in the money laundering investigation against Vivo and related firms.

On July 13, 2022, the high court had allowed Chinese Vivo to operate its various frozen bank accounts subject to furnishing of a bank guarantee of Rs. 950 crore with the agency and maintaining a balance of Rs. 251 crore in the bank accounts.

Vivo’s counsel had contended that the ED can only seize what they have discovered in their search operations and not the company’s bank accounts which were already disclosed to all the authorities.

He had said that freezing of the bank accounts brought the functioning of the petitioner to a standstill and there were crores of rupees that have to be paid as statutory dues apart from the payment of salaries to its employees.

In response, the ED said that 22 firms related to the India unit of the Chinese company are being investigated for suspicious transactions to China and these 22 entities are held either by foreign nationals or foreign entities in Hong Kong.