Consider Vivo's representation on frozen bank accounts, Delhi High Court tells ED

The Delhi High Court has asked the Enforcement Directorate (ED) to consider Vivo Communication Technology Co Ltd's representation seeking permission to operate its frozen bank accounts by July 13.

The Chinese mobile manufacturer approached the Delhi High Court seeking urgent relief just days after the ED carried out raids on its premises and froze all the accounts linked to Vivo.

Vivo is seeking an order from the Delhi High Court for quashing the ED's order to freeze the company's bank accounts. In its urgent petition, the company says that it approached the agency first seeking permission to operate these accounts. Vivo knocked on the high court's door only after the agency refused to accept the company's urgent representation before July 11.

The court will hear the case next on July 13 and has asked the agency to consider the representation in the meanwhile before the next date of hearing.

The court's order came on the back of Vivo citing urgency in the matter.

Vivo argues that the ED action will prevent the company from making payments towards its statutory, regulatory, and obligatory dues, causing it to be in violation of many other legal provisions.

Vivo requires an amount of around Rs 2,826 crore towards its monthly payments which include salaries for its employees, rent for the premises, statutory dues like custom duties and GST among others, refund against cancelled orders of customers as well as daily business operations.

Owing to the ED's action and the widespread publicity given to it, a "cloud of suspicion and apprehension pervades the business of the petitioner (Vivo)," the petition says. The business of the company "has now been set on a path of commercial and civil death," it adds.

The agency, on the other hand, argued that the search and seizure process was ongoing and one location was still being searched as on date. The search operation would conclude by the end of today, the counsel for the ED told the court.

The probe and the following action were on the basis of an FIR registered in Delhi in 2021, the counsel representing the ED told the court. The FIR alleged wrong-doing on the part of Vivo and its associate companies and claimed that many companies were formed on the basis of forged documents, the court was told today.

During the search and seizure action, a large number of incriminating materials have been found, the ED's lawyer added. "There is some serious concern and there are prima facie proceeds of crime," the counsel for ED added pressing for the statutory process to be completed.

The ED's action is being carried out under the provisions of Prevention of Money Laundering Act (PMLA).

Problems for the mobile manufacturer began on July 5 when the ED conducted a surprise search operation at Vivo's registered office and manufacturing plant in Gurugram and Greater Noida respectively.

The agency also issued notices for freezing all of Vivo's bank accounts.

The searches were conducted for Vivo and 23 associated companies and across 48 locations and made large seizures.

The ED action against Vivo pertains to alleged money laundering and the agency has claimed that one of the former directors of the company opened several shell companies for the purpose of laundering money for Vivo.

The agency has claimed that Vivo remitted almost 50 percent of its turnover amounting to over Rs 62,000 crore outside of India, predominantly to China, to evade tax.