The three major reasons for the ‘unhealthy’ growth of Chinese smartphone makers are unfair market practices, exploitation of cheap labour and Reverse Engineering. Chinese companies adopted predatory practices and captured the market of smartphones and electronic devices in India and elsewhere. It was always suspected that Chinese companies violate the privacy of their users and indulge in data theft. It was accused multiple times of selling user data to the Chinese military establishment and weaponising user data. But ever since Indian financial agencies launched an investigation against Chinese smartphone makers, serious violations of Indian laws and money laundering cases have been tumbling out from their closet.
ED Raids and Chinese Embassy crying hoarse
After Xiaomi, another Chinese smartphone giant is facing the heat of Indian laws for ‘scamming’ millions from the Indian economy. Chinese mobile manufacturing company Vivo has been accused of money laundering. The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) are investigating the case.
In connection to this, ED raided premises and related firms of Vivo Company in 44 locations. The raids were spread across 22 states including Delhi, Uttar Pradesh, Meghalaya and Maharashtra. All these raids were conducted under the Prevention of Money Laundering Act (PMLA).
Read More: Modi Government goes hammer and tongs after Chinese smartphone companies
Meanwhile, some reports suggest that the directors of Vivo, Zhengshen Ou and Zhang Jie, were not seen anywhere during the entire operation by ED. So the ED sources are suspecting that both the directors of Vivo have fled the country.
Vivo directors Zhengshen Ou and Zhang Jie fled from India as ED intensified inquiry into the money laundering case against the Chinese firm: Sources
ED had conducted searches at 44 places across country in a money-laundering probe against Vivo & related firms on July 5
— ANI (@ANI) July 6, 2022
Read More: China is now crying hoarse over India’s Chinese app ban
Rattled by ED raids on its ‘spying arm’, that is, Chinese smartphone makers, the Chinese Embassy issued a statement asking for a ‘fair’ probe from the Indian agencies. Ironically, China also sermoned India to abide by laws, and asked it to not indulge in ‘discriminatory’ business environment.
The Chinese Foreign Ministry Spokesman Zhao Lijian addressed the media queries on these raids on Chinese companies in India. He said, “We hope the Indian authorities will abide by laws as they carry out the investigation and enforcement activities and provide a truly fair and non-discriminatory business environment for Chinese companies investing and operating in India.”
Read More: Chinese investments are making Singaporean companies burn their hands in India
The spokesman of the Chinese Embassy in New Delhi said that frequent investigations by Indian authorities ‘disrupt’ their normal business activities and damage their ‘goodwill’. He lectured that with this India will impede business environment in the country, and affect the confidence of market entities from other countries investing in India.
Chinese embassy miffed over raid by ED on vivo's India subsidiary. This even as reports of directors, both Chinese nationals fleeing India. pic.twitter.com/8uWJwEqiOn
— Sidhant Sibal (@sidhant) July 6, 2022
Also Read: India shows the door to the Chinese Great Wall Motors
Chinese smartphone companies: More trouble than they’re worth
Not just the ED and CBI, the Ministry of Corporate Affairs (MCA) too is closely monitoring the Chinese mobile manufacturing firms. In addition to the ED raids, Local units of Vivo Mobile Communications are facing heat of the law for the alleged financial irregularities.
In April this year, the ED took actions against the other Chinese smartphone giant Xiaomi Technology Private Ltd. It seized Rs 5,551.27 crore of assets of Xiaomi from their bank accounts. The agency took this action under the provisions of Foreign Exchange Management Act (FEMA). The amount seized was in connection with the illegal outward remittances made by the company.
Isn’t it ironic to hear words like ‘fairness’, ‘non-discriminatory business environment’, and ‘abide by laws’ established from the Chinese side? China is a nation which doesn’t allow companies of foreign nations to function inside their territory. It has deployed a great firewall to fend away global information from their citizens.
Furthermore, they only see their companies and citizens as a tool to gather useful information from other nations. That is why all the major democracies including India never allowed China to enter their 5G and telecommunication market. The law has just started taking its course. There are definitely many deep dark secrets of China that will tumble out from these investigations on Chinese smartphone companies.
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