Chinese smartphone brand Vivo vows support for executives arrested in India amid geopolitical tensions

India’s financial-crime-fighting agency has arrested four Vivo executives as part of money-laundering investigation
Vivo, the second most popular smartphone brand in India, is among several Chinese companies that have come under regulatory scrutiny

Smartphones

Iris Dengin Shenzhen

Published: 9:00pm, 11 Oct 2023

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Chinese smartphone maker Vivo has vowed to “exercise all available legal options” to help its four executives arrested in India, as mainland businesses contend with rising geopolitical tensions between Beijing and New Delhi.

The executives, including one Chinese national, were arrested on Tuesday by India’s Enforcement Directorate (ED), an agency responsible for fighting financial crimes, according to a report by Reuters citing anonymous sources.

Dongguan-based Vivo “firmly adheres to its ethical principles and remains dedicated to legal compliance”, the company said in a statement to the South China Morning Post on Wednesday. “The recent arrest deeply concerns us. We will exercise all available legal options.”

Indian authorities raided dozens of Vivo’s offices in July last year on suspicion of money laundering, following similar actions against its Chinese peers Xiaomi and Huawei Technologies in the world’s second-largest smartphone market.

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In December, India’s revenue intelligence unit, a branch of the Finance Ministry, held up some 27,000 Vivo smartphones worth nearly US$15 million at a New Delhi airport, preventing the company’s Indian unit from exporting the devices to neighbouring markets, according to a report by Bloomberg at the time.

Vivo was the world’s fifth-biggest smartphone vendor by shipments in the second quarter this year, according to market research firm Counterpoint.

In India, Vivo ranked second in the same period with a 17 per cent share, closely behind Samsung Electronics with an 18 per cent share and just ahead of Xiaomi with a 15 per cent share, Counterpoint data showed.

Vivo and other Chinese technology companies have become prime targets of regulatory scrutiny in India after a deadly Himalayan border clash between soldiers from the two countries in June 2020.

A logo of Xiaomi outside a shop in Mumbai, India. Photo: Reuters

Since then, India has banned dozens of Chinese-linked apps, including ByteDance’s short-video sharing platform TikTok and Tencent Holdings’ PUBG Mobile game, citing national security concerns.

Vivo rival Xiaomi is also engaged in a legal fight with Indian authorities to retrieve US$676 million in funds seized from the firm’s local subsidiary in April last year over allegations of foreign exchange violations.

The ED has accused Xiaomi India of making suspicious remittance payments over the years to three foreign-based entities. India’s High Court in April this year rejected Xiaomi’s plea for the government to return the seized funds.

Smartphone makers are facing further setbacks in India after the country proposed earlier this year new rules that would force companies to provide users with the option to remove pre-installed apps. Those rules would also require every major operating system update to be screened by the government before it is released to consumers.