ED Moves Delhi HC Against Trial Court's Order Granting Release to 3 Top Executives of Vivo India

The Enforcement Directorate on Tuesday moved the Delhi High Court challenging the trial court's order directing the release of three accused, including the interim CEO of Chinese smartphone maker VIVO, and others in a money laundering case, ANI reported.

Last week, the trial court granted the plea filed by Hong Xuquan, Harinder Dahiya, and Hemant Munjal, challenging their arrest and subsequent custody in the money laundering case. The court directed their immediate release, citing that the accused were not presented before the court within 24 hours of arrest, deeming their "custody illegal."

The trio claimed they were arrested on December 21, challenging the ED's record of December 22. The ED sought judicial custody after the expiration of custodial remand, maintaining the December 22 arrest date.

The arrested individuals include Hong Xuquan alias Terry, interim CEO of VIVO India; Harinder Dahiya, Chief Financial Officer of VIVO India; and Hemant Munjal, VIVO’s consultant. Advocates Manish Jain and Simon Benjamin represented the ED, while Senior Advocates Siddharth Aggarwal and Arvind Nayyar appeared for the accused.

This case originated in October when the ED arrested four individuals, including a Chinese national and the MD of Lava International. The recent development comes after the Patiala House Court of Delhi acknowledged a prosecution complaint (chargesheet) filed by the ED under the Prevention of Money Laundering Act (PMLA) concerning the Chinese mobile company Vivo. The chargesheet involves Chinese national Guangwen Kuang, Lava International's MD Hariom Rai, Nitin Garg, and Rajan Malik.

According to the ED chargesheet, VIVO India was accused of cheating the Government of India, establishing an intricate network in the country. The ED alleged that certain Chinese shareholders of Grand Prospect International Communication Private Ltd forged identification documents and falsified addresses during the incorporation process.

During the inquiry, fraudulent activities were discovered by the Ministry of Corporate Affairs. The ED claimed that the said company was not reported as a subsidiary of Vivo in official records, despite publicly presenting itself as one. The Director and shareholder Zhang Jie were accused of using a false driving license to apply for a Director Identification Number (DIN) and opening a bank account using a fake license.

Following the incorporation of Vivo India, 19 more companies, including GPICPL, were established across India, allegedly controlled by Chinese nationals. The founder and first director of Vivo India, GPICPL, and all other entities were identified as Bin Luo, with Nitin Garg assisting in the incorporation of most Vivo Group companies.

Raids conducted on October 9 resulted in the seizure of cash exceeding Rs 10 lakhs, leading to the arrest of four individuals, including a Chinese national, MD of Lava International, and a Chartered Accountant. The ED initiated a money laundering case on February 3, 2022.