India is probing the local units of ZTE and Vivo Mobile Communications for possible financial irregularities, expanding its investigation into additional China-based enterprises after fined Xiaomi, some documents have revealed.
The Ministry of Corporate Affairs will examine the auditor reports, and documents seen by Bloomberg showed information from unidentified sources indicating potential breaches, such as fraud.
The documents also said that Vivo’s inquiry was requested in April this year to determine whether there were major abnormalities in ownership and financial reporting, while asking officials to examine ZTE’s records and find the findings “on an urgent basis”. on” was requested to provide.
Ministry of Corporate Affairs started investigation
from 2020, when India And as China engaged in the bloodiest conflict over the disputed Himalayan border in decades, New Delhi increased its oversight of Chinese companies.
As a result, more than 200 Chinese mobile applications have been banned by the government, including Alibaba Group Holding Ltd’s shopping services, ByteDance Ltd’s TikTok and Xiaomi’s phone app.
Indian security officials are monitoring more than a dozen Chinese loan apps aimed at low-income people. Officials say these loan apps send data to their Chinese partners, where it can be leveraged.
Beauty Camera: Sweet Selfie HD, Beauty Camera – Selfie Camera, Equalizer & Bass Booster, CamCard for Salesforce Ant, Isoland 2: Ashes of Time Light, Viva Video Editor, Tencent XRiver, Onmoji Chase, Onmoji Arena, AppLock, Dual Space Lite Among 54 Chinese apps banned by the Ministry of Electronics and Information technology (MeitY) in February 2022.
According to an investigation conducted by security and investigative agencies, some Chinese enterprises in India were also found to be involved in tax evasion.
According to a report by the Director General of GST Intelligence in India, some Chinese companies were availing bogus Input Tax Credit (ITC) from some firms without receipt of genuine goods or services. It was also stated that these firms were converting and collecting GST from customers and not collecting it.
Additionally, it was revealed that some Chinese companies, in collaboration with Indian companies, were issuing fake invoices to various Chinese companies without actually providing services to various Chinese companies with Chinese nationals as directors.
It is noteworthy that in 2021 the Income Tax Agency conducted raids against ZTE Corp, which exposed tax debt of hundreds of crores throughout the year, unaccounted wealth and inability to deduct tax at source over several financial years.
Additionally, reports also said that Chinese tech giant Huawei attempted to evade taxes in India by falsifying its accounts for several years, the IT department said in February this year.
It should also be noted that last December, the IT department conducted a search operation on Chinese smartphone makers and vendors Xiaomi and Oppo. Both the companies were found to have failed to comply with the regulatory order laid down by the IT Act 1961 for disclosure of transactions with affiliated enterprises.
However, the Enforcement Directorate (ED) has earlier said that it has attached assets worth $725 million (Rs 5,500 crore) from Chinese tech giant Xiaomi for violating the country’s foreign exchange laws. Under the Foreign Exchange Management Act (FEMA), 1999, ED seized money from Xiaomi’s bank accounts in the case of this popular smartphone company technology India Pvt. Ltd.
As recently reported, the Ministry of Corporate Affairs has started scrutinizing the books of accounts of over 500 Chinese enterprises.
In addition to ZTE and Vivo, the inspection included Xiaomi, Oppo, Huawei Technologies, and various Alibaba Group Indian subsidiaries such as Alibaba.com India E-Commerce Pvt. Ltd. and Alibaba Cloud (India) LLP.
The ministry has reportedly issued letters to companies seeking information on directors, shareholders, ultimate beneficiaries and owners in some cases, and is in the process of obtaining comparable information from the remaining companies.
However, according to Bloomberg, a report is expected in July this year. It was also stated that after the inspection report is completed, the ministry will decide whether a major fraud investigation is required by the Serious Fraud Office.
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