Indian officials are reportedly looking into the local assistance that two Chinese nationals received when they established a company that claimed to be a subsidiary of the Vivo smartphone manufacturer, according to a report this week from ET.
Digital Desk: The role CAs, or chartered accountants,
played in the construction of shell companies used to launder money in China is
one of the areas that has garnered particular attention since India boosted its
scrutiny of businesses with operations there in 2020.
The Ministry of Corporate Affairs has reportedly started
the process of reviewing the financial records of more than 500 Chinese
companies, according to a source with knowledge of the issue who recently
talked with Bloomberg. The source added that in addition to ZTE and Vivo, this
also includes Xiaomi, Oppo, Huawei Technologies, and a number of Indian
subsidiaries of the Alibaba Group, including Alibaba.com India E-commerce Pvt.
Ltd. and Alibaba Cloud (India) LLP. The source asked to remain anonymous
because the information is private.
Indian officials are reportedly looking into the local
assistance that two Chinese nationals received when they established a company
that claimed to be a subsidiary of the Vivo smartphone manufacturer, according
to a report this week from ET.
In Jammu & Kashmir, Grand Prospect International
Communication Pvt Ltd. is a distributor of Vivo goods. Chinese manufacturers
make Vivo. It is believed that false documents were used to register the firm
and get director identity numbers.
Tuesday saw over 40 raids by the Enforcement Directorate
at locations associated to Vivo and its affiliates, including Grand Prospect.
The central agency is looking into whether any shell companies were used to
launder money.
The two Chinese citizens are stockholders in Grand
Prospect. The company portrayed itself as a Vivo subsidiary and was established
to engage in fraudulent activities, according to the deputy registrar's police
report.
The two Chinese nationals used the New Delhi chartered
accountant's business address, according to an investigation by the deputy
registrar of companies for Delhi and Haryana. According to the investigation,
the CAs assisted the company in becoming incorporated by "witnessing"
the papers and signatures of the Chinese nationals.
According to the deputy registrar of
companies' investigation, the company secretary is suspected of certifying
practises linked to proactive enforcement and compliance with the legal
requirements under the Companies Act without reviewing them.
No comments from ICAI so far.
The government
of India has reportedly proposed disciplinary action against 400 Chartered
Accountants and Company Secretaries (CSs) for their suspected role in forming
Chinese shell businesses in Indian towns by flouting laws and regulations,
according to a June 20 article in The Hindu.
The professional body for CAs in
India, the Institute of Chartered Accountants of India (ICAI), stated that
complaints are being handled in accordance with the Chartered Accountants
Procedure of Investigations of Professional and Other Misconduct and Conduct of
Cases Rules, 2007, and that it will only be possible to confirm the allegation
and the number of professionals involved after the investigation.
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