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Chinese Owners Of Oppo Accused Of Financial Crimes

Chinese Company BBK Electronics who own the Oppo, Realme and Vivo brands are facing a new wave of problems with the Indian Government accusing their Vivo operation of financial crimes involving the transfer of funds illegally in an effort to avoid paying taxes.

This is the same Company, whose products were dropped by European retailers, after Nokia took them to court and won, in a patent battle with the Chinese business  accused of stealing patents.

Yesterday, India’s financial crimes agency arrested a Chinese employee of the business who was accused of helping  Vivo management,  transfer funds illegally to NewsClick, a news portal that is also under investigation on charges of spreading Chinese propaganda in India. The portal also operates in Australia.

Vivo said it “will exercise all available legal options” on behalf of its employee, Andrew Kuang.

The latest development is part of an ongoing development after authorities raided Vivo’s office last year, accusing the Company of illegal remittances of funds from India to China.

Yesterday’s arrest comes on top of other investigations with the business accused in the past of customs evasion in an effort to not pay duty on goods.

The Prevention of Money Laundering Act (PMLA) which Indian authorities are using in their latest investigation has been used on several occasions to stop money laundering.

It is “a very stringent law and allows for criminal cases to be filed, unlike regular foreign exchange violations which are majorly considered civil offenses,” according to Atul Pandey, Senior Partner at legal firm Khaitan told the BBC.

Vivo has also been accused of customs evasion by the tax enforcement agency.

In the past 18 months, Indian authorities have also targeted other Chinese mobile phone companies such as Xiaomi by freezing $670m of assets.

Earlier this year, India’s minister of state for electronics and IT Rajeev Chandrashekhar told parliament that Chinese companies had evaded taxes to the tune of $1.1bn. He said the government had managed to recover only about 18% of this amount.

Speaking to the BBC on the condition of anonymity, a senior legal counsel who represents several Chinese companies in India said that the crackdown was initially meant to put pressure on the Chinese government in the aftermath of a deadly border clash in 2020 that killed 24 soldiers. India had responded then by banning hundreds of Chinese apps, including TikTok.

A director of the struggling Oppo distributor OMC electronics in Australia, “Alex” Chao Duan who is the son of the son of Duan Yongping the founder of BBK electronics, who own the struggling Oppo, Realme, Vivo and One Plus brands recently paid $20.5M for a house in Sydney.

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