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Synopsis

The Delhi High Court on Friday last week upheld a trial court order sending Chinese national Guangwen alias Andrew Kuang to three-day Enforcement Directorate custody in a money laundering case against Chinese smartphone maker Vivo.

The bench of Justice Swarana Kanta Sharma dismissed a petition by Kuang, an office bearer of Vivo Mobile India, challenging the trial court order of remand.

The court noted that as per the grounds of arrest and the remand application, the petitioner, “one of the main conspirators”, was involved in the incorporation of the companies throughout the country for acquiring and siphoning off proceeds of crime.

"Ultimately, the investigating officer had concluded (in grounds of arrest) that the present petitioner was the prime conspirator of the formation of these companies through which acquisition of proceeds of crime had taken place and which, after layering and integration, had been siphoned off by Vivo India," the court observed in an order dated October 13.

“This court does not find any infirmity in the order of remand dated 10.10.2023 challenged before this Court as the same takes into account the mandate of compliance of provisions of Section 19 of PMLA as well as Section 45 of PMLA. Accordingly, the present application stands dismissed along with pending applications”, the court ordered.

On Friday i.e. October 13, the trial court had extended the custody of the petitioner with ED by three days in the case.

On October 10, the petitioner had argued before the high court that his arrest was carried out in a malafide manner and against the mandate of the Prevention of Money Laundering Act (PMLA) and no case was made out against him.

Rejecting the objections, the court observed that the remand application specifically mentioned that on the basis of the investigation carried out so far and material collected, the present petitioner was “guilty” of the offence of money laundering and that written grounds of arrest were also given to him.

The federal agency had raided the company and its linked people in July 2022, claiming to have busted a major money laundering racket involving Chinese nationals and multiple Indian companies. The ED had then alleged that a whopping Rs 62,476 crore was 'illegally' transferred by Vivo to China in order to avoid payment of taxes in India.

Case Title: Guangwen Kuang @ Andrew v. Directorate of Enforcement & Anr.