New Delhi: The FIR filed by Delhi Police in the NewsClick case has alleged that “big Chinese telecom companies” like Xiaomi and Vivo have incorporated thousands of shell companies in India to illegally infuse foreign funds to be used in disrupting the sovereignty of India and causing disaffection against the nation.
The FIR was registered on 17 August, 2023, and included numerous allegations including that the news portal NewsClick was involved in attempts to show Arunachal Pradesh and Kashmir as not being part of India, inciting defection among farmers, and disrupting supplies and services for people.
The FIR, a copy of which ThePrint has accessed, states that “it is further learnt that big Chinese Telecom companies like Xiaomi, Vivo, etc. incorporated thousands of shell companies in India in violation of PMLA/FEMA (Prevention of Money Laundering Act/Foreign Exchange Management Act) for illegally infusing foreign funds in India in furtherance of this conspiracy.”
A spokesperson for Vivo told ThePrint, “Vivo denies the allegations in the FIR and has no knowledge of the said investigation and repudiates all allegations pertaining to conspiracy.”
ThePrint reached Xiaomi via calls but had not received a response by the time of publication. This report will be updated if and when a response is received.
As per the FIR, the alleged ‘conspiracy’ was to disrupt the sovereignty of India and to cause disaffection against India. Towards this, it said, large amounts of funds were routed from China in a “circuitous and camouflaged” manner and paid news was intentionally peddled criticising domestic policies, development projects of India and promoting, projecting and defending policies and programmes of the Chinese government.
“It is also learnt that People’s Dispatch Portal, owned and maintained by M/S PPK Newsclick Studio Pvt. Ltd. has been used for intentionally peddling these false narratives through paid news in lieu of crores of rupees of illegally routed foreign funds as part of conspiracy,” the FIR noted.
It further alleged that four people — Prabir Purkayastha, Neville Roy Singham, Geeta Hariharan and Gautam Bhatia (whom the FIR has highlighted as the key person) — conspired to create a ‘legal community network’ in India to campaign for and put up a “spirited defence of legal cases” against the named Chinese telecom companies in return for benefits by these firms.
Past incidents
This is not the first time that Chinese smartphone firms have been in the news over FEMA violations and tax evasion in India.
In April 2022, funds worth over Rs 5,551 crore of Chinese mobile manufacturing company Xiaomi India were “seized” by the Enforcement Directorate (ED) for violating the Indian foreign exchange law.
“Xiaomi India is a wholly owned subsidiary of China-based Xiaomi group,” the ED had said at the time. “This amount of Rs 5,551.27 crore lying in the bank accounts of the company has been seized by the Enforcement Directorate.” It added that the seizure of funds had been done under relevant sections of FEMA after a probe.
Likewise, in July 2022, the ED had alleged that Vivo India remitted almost 50 percent of its domestic sale proceeds overseas, mainly to China, so it could report huge losses in several domestically incorporated companies to avoid paying tax in India.
The ED, which seized 119 bank accounts of related entities, had said that of the total sale proceeds of Rs 1,25,185 crore in the country, Vivo India had transferred out Rs 62,476 crore.
In a reply in Parliament in July this year, the government said it had detected Rs 9,075 crore worth of tax evasion by Chinese mobile handset makers since April 2017, of which the Indian tax authorities have been able to recover only Rs 1,630 crore, or 18 per cent.
In the same response, the government said it had detected Rs 682.5 crore worth of customs duty evasion by Xiaomi Technology India from 2019-20 to 2021-22, and GST evasion of Rs 168.6 crore since July 2017.
This is an updated version of the report
(Edited by Zinnia Ray Chaudhuri)
Also read: ‘Journalism can’t be prosecuted as terrorism’ — media groups write to CJI on NewsClick raids