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Vivo and ZTE Chinese Smartphone Brands Under Government Scanner for Financial Irregularities: Report

A new report suggests that Chinese smartphone companies Vivo and ZTE are under scrutiny in India. The domestic units of ZTE Corp and Vivo Mobile Communication Co. are being investigated for financial irregularities. Xiaomi India is another major Chinese smartphone maker that is currently under investigation by the ED. Also Read – Vivo X80 Pro is now receiving Android 13 based Funtouch OS 13 update in India

A report by Bloomberg indicated that the Ministry of Corporate Affairs received information from unknown sources about possible breaches, including fraud. The Ministry shall investigate the reports of the company’s auditors. Also Read – Vivo X90, X90 Pro, X90 Pro+ Launched With 120Hz Display, 4nm Chipset, Up To 120W Fast Charging

The department received an inquiry to check for “significant property and financial reporting irregularities,” according to documents spotted by Bloomberg. In addition, the relevant authorities were also requested to urgently inquire about ZTE’s corporate accounts. Also Read – The Indian government is reintroducing the Digital Personal Data Protection Bill, which could allow some cross-border data transfer

Xiaomi India is also under scrutiny by the Enforcement Department (ED) for irregularities. The Chinese company’s accounts of more than Rs 5,500 crore have been frozen by the ED in a bid to prevent the company from using those funds.

The Karnataka High Court has given Xiaomi some relief by allowing the company to use this money for day-to-day operations. Earlier this month, the ED asked the court to re-freeze the company’s accounts.

Xiaomi was subjected to an ED scanner earlier this year, in the month of February. The Indian agency alleged that the company made illegal transfers. The company has been accused of making these transfers from 2015, just a year after it entered the Indian market.

Xiaomi India has categorically denied any wrongdoing on its part. The company claims that the royalties payments and bank statements are legitimate. The brand claims these royalty payments were for licensed technologies and IP addresses. They stated that these IP addresses were used for Xiaomi products sold in India.

The new investigation into Vivo and ZTE after Xiaomi India is expected to alert other major smartphone manufacturers in India. Xiaomi remains the best-selling smartphone brand in the country due to its diverse budget and mid-range offerings. The company’s Redmi range is very popular due to its value for money. We shall see if the ongoing investigations will affect the company’s image in India.