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The Delhi high court on Friday directed the Enforcement Directorate (ED) to decide by 13 July on Chinese smartphone maker Vivo’s representation seeking permission to operate its frozen bank accounts.
The court also asked the federal financial-crime probing agency to seek instructions on a plea by Vivo Mobile India Pvt. Ltd’s challenging freezing of its nine bank accounts.
Vivo India is a unit of China’s Vivo Communication Technology Co. Ltd, which designs and develops smartphone accessories, software and online services.
The ED, on Thursday, blocked nearly 119 bank accounts linked to Vivo’s India business and its associates that were holding ₹465 crore as part of a probe into alleged money-laundering by the company.
The agency also raided 48 locations of Vivo and 23 related entities this week, alleging that the sale proceeds of Vivo India were transferred out of the country to show losses and avoid paying taxes. The ED also claimed to have found fixed deposits of ₹66 crore of Vivo India, 2 kg gold bars, and ₹73 lakh in cash.
Vivo had filed a writ petition before the high court, seeking the quashing of ED’s 5 July order freezing the bank accounts under the Prevention of Money Laundering Act, 2002. The company submitted to the court that the agency’s decision will cause “grave injustice” to it, which will also negatively impact its reputation and business operations.
Vivo argued that if the funds in its bank accounts continue to be frozen, it would be further in breach of law as it would be unable to pay its statutory dues besides employee salaries. “The freezing also prevents payment of salaries to the thousands of employees,” Vivo said in its 97-page petition.
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