Delhi HC allows Vivo to operate its bank accounts after Rs 950-crore bank guarantee

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In a breather for Chinese mobile manufacturer Vivo, the Delhi High Court has allowed the company to operate its bank accounts that were under a debit freeze by the Enforcement Directorate (ED) in relation to a  money laundering case.

The permission comes on the condition that Vivo will furnish a bank guarantee of Rs 950 crore to the ED and maintain a balance of Rs 250 crore in its account at all times. The company has been granted seven working days to furnish the bank guarantee as per the court's order.

During the course of the hearing, the ED had informed the court that suspected proceeds of crime are to the tune of Rs 1,200 crore. These monies, as per the ED, were allegedly transferred to Vivo by one of its associate companies - GPICPL.

The high court's order came after the mobile manufacturing company undertook to secure the amount of Rs 1,200 crore through bank balance and bank guarantee. But the company should be "allowed to breathe", its counsel urged the court.

The high court took on record the undertaking by Vivo's counsel and agreed to hear the case for final hearing on July 28. Notice is issued to the ED seeking its response on Vivo's plea which essentially sought de-freezing of its bank accounts.

The court noted that Vivo, in line with the orders and directions, had supplied relevant data to the ED for its analysis and inspection. However, on account of this data being voluminous, ED sought time to carry out its analysis.

The case

After the ED carried out surprise searches at Vivo's premises earlier this month and froze all its bank accounts, the mobile manufacturer sought permission to operate its accounts to facilitate its statutory and obligatory payments.

On its request not being given an urgent consideration by the ED, the company approached the Delhi High Court with the same request and said if it was not allowed to make payments towards its customer obligations, salaries, taxes, and other statutory dues, it will face a commercial and civil death.

On an earlier occasion, the high court had asked the ED to consider Vivo's request for permission to operate its accounts. However, with no development on that front, the high court granted a small breather to the company in its interim order today.