NEW DELHI: Under the lens of the country’s investigating agencies, Chinese mobile manufacturer Vivo is looking to shed the taint by restructuring the top management, sources in the know told this newspaper. The main objective of the restructuring process is to get rid of Chinese nationals at the top.
Current chief executive officer Jerome Chen, say sources, may make way for Harinder Dahiya, who is the chief financial officer of the company. The company is also likely to ‘reward’ an ex-director of Vivo, Hemant Munjal who has been at the centre of Enforcement Directorate’s Vivo money laundering investigation, with a cushy position in the company.
Sources said though many Chinese nationals associated with Vivo or its associated companies in India have left the country, recently one Chinese national was stopped at the airport from leaving the country.
According to the sources, Vivo would now have Indian nationals at the top level even if it would be run de facto by people sitting outside.
“With fewer Chinese in Vivo India, it is important to explore the restructuring of the business operations by the company to bypass the regulators. Vivo is now changing its working and replacing Chinese shareholdings in old companies in each state with Indian employees as dummy directors,” a source told TNIE.
When contacted, Vivo spokesperson denied any knowledge of restricting in the company. The Chinese smartphone maker has been under investigation by the Indian enforcement agencies over allegations of money laundering and tax evasion. The ED has alleged that Vivo, through a web of companies opened across India, has been able to remit Rs 62,500 crore out of India, mainly to China. The remitted amount, according to ED is 50% of the total sales proceeds of the company.
The ED has recently charge sheeted 47 entities and individuals, who were part of the conspiracy to channel Vivo’s money out of India. Hemant Munjal and his chartered accountant brother Dimple Munjal are among those named in the charge sheet. An ex-director of Vivo, Hemant Munjal, according to the ED charge sheet, is highly suspected that he may be aware of the business activities of Vivo Mobile India. ED had recovered Rs 50 lakh from his brother’s possession during the searches.
The Enforcement Directorate alleged in the charge sheet that Vivo engaged in money laundering and tax evasion by under-reporting the value of imported goods and making illegal payments to offshore entities. The next date of hearing is 28 March and ED is expected to file another supplementary charge sheet this time focusing on Indian masterminds behind Vivo’s network of companies with Chinese partners.
Giving a facelift
Vivo plans to get rid of Chinese directors and induct Indian faces to escape regulatory scrutiny
Current CFO Harinder Dahiya might take over as the CEO of the company
Vivo has allegedly been engaged in money laundering by under-reporting the value of imported goods
It has been charged with illegally remitting Rs 62,000 crore out of India
ED has chargesheeted 47 entities and individuals in money laundering case