An employee of the smartphone manufacturer Vivo, Andrew Kuang, was arrested by India’s financial crimes agency. Although Indian officials have not commented on the arrest, Vivo has expressed its intention to pursue all available legal options in support of its employee.
This arrest follows a raid on Vivo’s office last year, where authorities accused the company of engaging in illegal remittances from India to China. Vivo, the second-largest smartphone brand in India after Samsung, has consistently denied any wrongdoing and stated its compliance with Indian law.
The arrest comes in the midst of a deepening rift between India and China. Recently, Indian police formally accused Vivo of assisting in the illegal transfer of funds to NewsClick, a news portal under investigation for allegedly spreading Chinese propaganda.
Tuesday’s arrest was made under the Prevention of Money Laundering Act (PMLA), which allows for criminal cases to be filed, unlike regular foreign exchange violations, which are primarily considered civil offenses. Vivo has also faced allegations of customs evasion by the tax enforcement agency.
Vivo is owned by China’s BBK Electronics, which operates other brands like Oppo and Realme in India. In the past 18 months, Indian authorities have targeted other Chinese mobile phone companies, such as Xiaomi, by freezing $670 million in assets.
India’s minister of state for electronics and IT, Rajeev Chandrashekhar, stated earlier this year that Chinese companies had evaded taxes amounting to $1.1 billion, with the government managing to recover only about 18% of this amount.
A senior legal counsel who represents several Chinese companies in India mentioned that the crackdown initially aimed to exert pressure on the Chinese government after a deadly border clash in 2020. This clash led to India banning hundreds of Chinese apps, including TikTok. Subsequent investigations have led to major Chinese firms like Xiaomi and Oppo India being accused of financial crimes, with both firms denying the allegations.
India-China relations have deteriorated, with India recently registering a “strong protest” over a new Chinese map claiming its territory.