Vivo must go to PMLA Appeals Tribunal over bank account freezing issue

Vivo must go to PMLA Appeals Tribunal over bank account freezing issue

Vivo must go to PMLA Appeals Tribunal over bank account freezing issue

The High Court in Delhi has asked Chinese smartphone maker Vivo to appeal to the PMLA Appeal Tribunal over the freezing of its bank accounts following a money laundering investigation by the Directorate of law enforcement.

Judge Prathiba M Singh asked Vivo, who has already appealed to the court, to file a summary plea there himself and clarified that until a decision, provisional or final, is taken by the court, the earlier high court orders asking the company to provide a bank guarantee of Rs. 950 crore and to maintain the credit balance of more than Rs. 251 crore to be able to use the bank accounts are to continue.

The procedure on the provisional requests as well as the final decision can be carried out quickly before the Court of Appeal within four weeks, either from the filing of the appeal, or from the first registration of the appeal with the requests interim, the court added.

“The interim arrangements, which have been ordered by this Court … will continue until such time as the Appeals Tribunal decides the interim claims or until the final decision on appeal, in terms of any orders that may be made by the Tribunal,” the court said in its March 28 order.

Judge Singh observed that since the initial orders to freeze debits have now merged with a final order from the adjudicating authority in December 2022, it is deemed appropriate to relegate Vivo to pursue appeals in the appellate court under of the Prevention of Money Laundering Act (PMLA).

The court issued the same order on the motion of Grand Prospect International Communication, a Vivo distributor also under investigation.

Vivo went to the High Court last year to overturn orders freezing its bank account. He also requested permission to process frozen bank accounts to make payments towards certain debts.

The ED filed the money laundering case after learning of an FIR from the Economic Crimes Wing of the Delhi Police against a distributor of an agency based in Jammu and Kashmir where he It was alleged that some Chinese shareholders of this company had falsified their identity documents.

The ED suspected that the alleged forgery was committed to launder illegally generated funds using shell or paper companies and some of these “proceeds of crime” were diverted to remain under the radar of Indian tax and law enforcement agencies.

The investigative agency had previously raided several locations across the country as part of the money laundering investigation against Vivo and related businesses.

On July 13, 2022, the high court had cleared Chinese Vivo to operate its various frozen bank accounts subject to providing a bank guarantee of Rs. 950 crore with the agency and maintaining a balance of Rs. 251 crore in the Bank accounts.

Vivo’s lawyer had argued that the ED could only seize what they had discovered during their search operations and not the company’s bank accounts which had already been disclosed to all authorities.

He had stated that the freezing of bank accounts had crippled the functioning of the petitioner and that there were millions of rupees which had to be paid as statutory dues in addition to paying the salaries of his employees.

In response, the ED said that 22 companies linked to the Indian unit of the Chinese company are under investigation for suspicious transactions to China and that these 22 entities are owned either by foreign nationals or by foreign entities in Hong Kong.

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