Vivo money laundering case: Court allows plea of accused including Chinese national, challenging their arrest and custody

New Delhi [India], December 30 : Delhi's Patiala House Court on Saturday allowed the application moved by accused persons challenging their arrest and custody in a money laundering case.
The accused have been released on the order passed by the court. The accused, namely Hong Xuquan, Harinder Dahiya and Hemant Munjal, had challenged their arrest and subsequent custody in the money laundering case.
Vacation judge Shirish Agrawal allowed the application. The court has ordered their release on furnishing bail bonds of Rs. 2 lakh each.
The accused were produced before the court after the expiry of custodial remand. The ED sought their judicial custody.
They were arrested on December 22. The ED submitted that the investigation is going on and that this order should not be given effect until the reopening of the court.
The counsel also said that they are going to challenge the order. The court rejected the request.
The court in New Delhi on Friday extended the ED custody of Hong Xuquan, the interim CEO of Vivo India and two others for one day in a money laundering case.
The court had also kept the application of the accused persons for order on Saturday.
They had filed an application challenging the arrest and declaring it illegal.
Senior counsel Siddharth Agarwal submitted that the arrest is illegal as they were produced before the court after more than 24 hours. Therefore, their arrest and custody is illegal.
They were taken to the ED office and they were not free to go outside, the counsel argued. It shows they were detained. In this situation, they are entitled to consequential release.
While opposing the application, the agency's Special Public Prosecutors (SPP), Manish Jain and Simon Benjamin, argued that the accused joined the ED team voluntarily. However, they were accompanied by the ED's vehicle.
It was also argued by the counsels for ED that there was no objection and protest till the accused were produced before the court.
It was also argued that, after considering the fact that custody remand was granted to ED.
On Thursday, ED's counsel, while seeking remand, argued that the summons had been issued to some people. They have to be confronted by the accused.
The data recovered from emails of accused persons also has to be confronted with the accused persons and recorded. They need time to investigate the matter, SPPs had argued.
On the other hand, senior advocate Siddharth Agarwal raised the issue of illegal arrest and submitted that an inquiry was conducted on the order of the predecessor court. The court also provided a copy of the inquiry report.
The court had noted that the judicial file was not received from the predecessor court.
After hearing the submissions, the court expressed its opinion, saying that the judicial file was not received from the predecessor court. In this situation, one day, police custody or judicial custody can be granted.
The senior advocate submitted that On December 7, 2023, the prosecution complaint was filed. The accused were arrested on December 22. The first remand was granted on December 23.
The accused were lifted on the evening of December 21, 2023.
Taken to three different locations in the ED vehicle and then to the office of the ED, Sr. Advocate had submitted.
The court said that the accused may be sent to one-day judicial remand as the judicial file is not there. Let the file come.
The matter of personal liberty may be dealt with by the concerned court familiar with the facts of the case, senior advocate submitted.
The defence counsels also submitted that every time they ask for an extension for custody, the bar is higher. There is no ground for extending the custody remand.
Digital data is already there. The accused have been in custody for the last five days, defence counsel argued.
On December 26 , they said the accused had to be confronted with the digital data. The application is the same. They have not mentioned the quantity of data, how many giga bytes, whether any disc has been used, defence counsel argued.
On December 26, the court extended the Enforcement Directorate's custody of three Vivo-India executives by two days.
The executives are being investigated for money laundering in connection with the Chinese smartphone maker and others.
The three accused, including the interim CEO, were arrested by the Enforcement Directorate (ED) in an ongoing investigation related to a money laundering probe by the central agency.
The accused, who were arrested by the Enforcement Directorate on December 22, 2023, were identified as Hong Xuquan alias Terry, interim CEO of VIVO India; Harinder Dahiya, Chief Financial Officer of VIVO India; and Hemant Munjal, VIVO's consultant.
Advocate Manish Jain and Simon Benjamin of the Enforcement Directorate appeared in the matter and Senior Advocates Siddharth Aggarwal and Arvind Nayyar appeared for the accused persons in the matter.
In this case, the Enforcement Directorate arrested four accused in October, including a Chinese national and the MD of Lava International.
Recently, the Patiala House Court of Delhi took cognizance of a prosecution complaint (chargesheet) filed by the Enforcement Directorate in connection with a Prevention of Money Laundering Act (PMLA) case related to the Chinese mobile company Vivo involving Chinese national Guangwen Kuang, Lava International's MD Hariom Rai, Nitin Garg and Rajan Malik under the different sections of the Money Laundering Act.
According to the sources, ED has also named Vivo Company as an accused in the matter of allegedly cheating the Government of India. It also stated that the company has set up an intricate network in India.
According to the ED, certain Chinese shareholders of Grand Prospect International Communication Private Ltd. incorporated the company based on forged identification documents and falsified addresses.
During the inquiry, certain fraudulent activities were found by the Ministry of Corporate Affairs.
The said company was not reported as a subsidiary of Vivo in the official records, whereas the said company publicly projects itself to be a subsidiary of Vivo, said ED.
ED further alleged that Director and shareholder Zhang Jie used a false driving licence to apply for a Director Identification Number (DIN) for giving his Shillong address and also used his fake driving licence to open the bank account.
With the allegations of cheating, an FIR in Police Station Kalkaji, South East Delhi, was registered under Section 417/120B/420 IPC and another FIR was also registered under Section 417/420/468/471/120B IPC by the Economic Offence Wing, Delhi Police, based on the complaint filed by Manjit Singh, the then Deputy Registrar of Companies, Ministry of Corporate Affairs, NCT of Delhi.
ED further alleged that soon after the incorporation of Vivo India, 19 more companies, including GPICPL, were incorporated across India, completely controlled by Chinese nationals.
The accused, Bin Luo, was the founder and first director of Vivo India, GPICPL and all other 18 entities at the time of their incorporation and the accused, Nitin Garg, had assisted in the incorporation of most of the companies of Vivo Group.
According to the Enforcement Directorate, raids were on the premises of the accused on October 9 and seized cash amounting to more than Rs 10 lakhs and arrested four accused, who have been identified as Guangwen Kyang alias Andrew Kuang, a Chinese national, Hari Om Rai, the MD of Lava International, Rajan Malik, and Nitin Garg, a Chartered Accountant.
The probe revealed that the PMLA investigation by ED was initiated by registering a money laundering case on February 3, 2022.