Govt Plans to Charge Vivo in ₹2,000 Cr Fund Diversion Case; Oppo, Xiaomi Also Under Probe

The Serious Fraud Investigation Office (SFIO) under the Ministry of Corporate Affairs is reportedly preparing to file a chargesheet against Chinese smartphone maker Vivo in December. The company is accused of diverting funds worth over ₹2,000 crore.

According to a Moneycontrol report, the charges will be filed under Section 447 of the Companies Act, 2013, which deals with corporate fraud and includes both civil and criminal penalties. The Registrar of Companies will determine the final penalty once it evaluates the chargesheet, the report said.

The SFIO began investigating Vivo, Oppo and Xiaomi in March, examining suspected irregularities exceeding ₹6,000 crore and pointing to significant compliance lapses, it was reported earlier. The probe followed an RoC report alleging fund diversion, which prompted the Ministry of Corporate Affairs to direct the SFIO to scrutinise Chinese smartphone manufacturers.

Investigators have reportedly found a clear money trail in Vivo’s case, indicating profit diversion and other financial irregularities amounting to more than ₹2,000 crore.

Chargesheets for Oppo and Xiaomi may take longer to complete.

Vivo is currently India’s largest smartphone brand by shipment volume and the third-largest by value after Apple and Samsung. The company is already facing multiple legal challenges in India, including a major money-laundering probe by the Enforcement Directorate (ED), which alleges that Vivo transferred substantial funds out of the country to evade taxes.

In May, a Delhi court summoned senior Vivo officials, including the CEO, CFO and the head of Vivo Mobile India, in connection with the ED case.

The ED filed a ₹20,241-crore money-laundering case against Vivo and associated companies in 2022, alleging that they created a complex and misleading corporate network to generate large revenues that were subsequently transferred overseas under the guise of importing goods.

The report comes as Vivo and Dixon Technologies are also awaiting Press Note 3 (PN3) approval from the government for their proposed manufacturing joint venture. The project requires PN3 clearance because Vivo is a Chinese company from a country sharing a land border with India.

As part of its broader consolidation plan, Vivo earlier sold its older leased manufacturing unit in Greater Noida to Bhagwati Enterprises, Micromax’s manufacturing arm and moved to a larger company-owned facility nearby, which is now operational, though the older plant still produces some Vivo models through Bhagwati.