Vivo PMLA Case: Delhi Court Sends Chinese National and Others to Judicial Custody till Oct 30

Delhi’s Patiala House Court has ordered the judicial custody of three individuals, including a Chinese national, until October 30 in connection with a case under the Prevention of Money Laundering Act (PMLA) related to the Chinese mobile company Vivo. The fourth accused in the case, Rajan Malik, was already remanded to judicial custody on the last hearing.

Vivo has consistently denied the allegations, with their spokesperson stating that they will pursue the necessary legal recourse.

On Wednesday, Guangwen Kuang, also known as Andrew, Hari Om Rai, and Nitin Garg were presented in court by the Enforcement Directorate (ED) after the end of their remand period. The ED sought the court’s direction to send Guangwen Kuang and Hari Om Rai to judicial custody, a request that was granted, with the custody period extending until October 30.

However, the ED, through Special Public Prosecutor Manish Jain, requested further remand for the accused Nitin Garg. The agency argued that Garg needed to be confronted with financial statements from 13 out of 20 companies, along with relevant financial notes from their inception to the financial year 2021-22. During the previous remand period granted on October 16, 2023, the ED had recorded 50 pages of statements from the accused and confronted him with over 1000 pages of financial statements.

In response, Additional Sessions Judge Devender Kumar Jangala declined to grant further custody remand to Nitin Garg, noting that a sufficient period of custody remand had already been provided to the ED. The court stated that there was no connection between the allegations against the accused and the documents to be confronted with him. The court also pointed out that the accused Nitin Garg had explained that his role was limited to the incorporation of companies in 2014, and he had no contact or connection with these companies afterward.

The ED failed to provide any material suggesting the accused’s involvement in audit or financial transactions of the companies after their incorporation, the court noted.

The ED’s case centers on certain Chinese shareholders of Grand Prospect International Communication Private Ltd., who allegedly incorporated the company using forged identification documents and false addresses. The company was not reported as a subsidiary of Vivo in official records, although it publicly presented itself as such.

The ED also alleged that Director and Shareholder Zhang Jie used a false driver’s license for Director Identification Number (DIN) to provide his Shillong address and used a fake driver’s license to open a bank account. Two FIRs were registered against him under IPC Sections 417, 120B, and 420, as well as 417, 420, 468, 471, and 120B, based on complaints from the Ministry of Corporate Affairs and the Economic Offense Wing, Delhi Police.

The ED claimed that, shortly after the incorporation of M/s Vivo India, 19 more companies, including M/s GPICPL, were incorporated across India, all controlled by Chinese nationals. The accused Bin Luo was the founding director in Vivo India, GPICPL, and all 18 other entities at the time of their incorporation. The accused Nitin Garg had assisted in the incorporation of most of the companies in the Vivo Group.

The ED conducted raids on the accused’s premises on October 9, seizing cash amounting to more than Rs 10 lakhs, and arresting four accused, including Guangwen Kyang (Andrew Kuang), the Chinese national, Hari Om Rai, the MD of Lava International, Rajan Malik, and Nitin Garg, a Chartered Accountant.

The PMLA investigation was initiated by the ED on February 3, 2022.