China says India risks scaring away investors with raids on its companies

Source: cnn.com

India risks damaging its reputation among foreign investors with its “frequent investigations” into Chinese companies, Beijing said this week.

China’s embassy in India saidin a statement Thursdaythat probes by Indian authorities into Chinese companies were disrupting “normal business activities” and chilling “the confidence and willingness of market entities from other countries, including Chinese enterprises to invest and operate in India.”

The criticism comes after India’s Enforcement Directorate — the country’s main financial investigation agency — raided major Chinese smartphone company Vivo over allegations of money-laundering earlier this week.

In a press release on Thursday, the Indian agency said it hadcarried out searches at 48 Vivo locations in the country, and seized 4.65 billion rupees ($60 million) from 119 bank accounts, including fixed deposits, cash and gold bars.

In the statement,the Enforcement Directorate has accused Vivo of tax fraud and said the firm remitted 624.8 billion rupees ($7.9 billion), mostly to China.

“These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India,” it said.

“The employees of Vivo India, including some Chinese Nationals, did not cooperate with the search proceedings and had tried to abscond,” the agency added.

A Vivo spokesperson in Indiasaid Tuesday that the company “is cooperating with the authorities to provide them with all required information.”

The raids on Vivo offices come two months after India seized more than $700 million from another big Chinese smartphone maker — Xiaomi. It was also accused of moving money out of the country illegally.

Xiaomi India said at the time that “all our operations are firmly compliant with local laws and regulations.”

Chinese phone makers dominate the Indian market, with Xiaomi being the top-selling brand, according to data compiled by Counterpoint. Vivo is also among the top five brands, the firm said.

India has been getting tough with Chinese companies since border tensions escalated between the world’s most populous countries two years ago. In 2020, India banned more than 200 apps — many of which were Chinese, including the wildly popular video platform TikTok.

SOURCE: CNN Business

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