The Ministry of Corporate Affairs (MCA) has instructed the Serious Fraud Investigation Office (SFIO) to probe Chinese smartphone giants Vivo, OPPO, and Xiaomi following a Registrar of Companies (RoC) report alleging ₹6,000 crore in fund diversion. The investigation began in March 2025 and may take about a year to complete.
What’s Going On?
- The RoC submitted a detailed report to the MCA highlighting suspected large-scale fund diversion, potential tax evasion, and irregular financial transactions involving Japanese firms. The RoC also shared its observations with GST and tax authorities like CBDT and CBIC.
- Based on these findings, MCA entrusted SFIO—India’s expert body for complex corporate fraud—to conduct a thorough investigation. SFIO’s inquiry involves examining records, financial transfers, and related-party dealings.
Why It Matters
- This move comes amid mounting regulatory pressure on Chinese tech firms operating in India, as authorities ramp up surveillance of their financial dealings to protect economic integrity.
- The SFIO has authority to recommend legal action, including court proceedings, against companies or their executives based on its findings.
Background Context
- Vivo Under ED Scrutiny: The Enforcement Directorate (ED) has previously accused Vivo India of laundering money through shell companies and remitting nearly ₹62,476 crore—amounting to around 50% of its turnover—to China between 2017 and 2021. Investigations are ongoing under the Prevention of Money Laundering Act (PMLA).
- In December 2023, ED arrested several senior executives of Vivo India as part of its money laundering probe.
- OPPO and Xiaomi – Historical Scrutiny: In 2022, Finance Minister Nirmala Sitharaman revealed that OPPO faced duty evasion notices of around ₹4,389 crore, Xiaomi ₹653 crore, and Vivo ₹2,217 crore. These cases involved misdeclaration of import values, GST fraud, and false accounting.The Hindu
Summary Snapshot
| Company | Allegation Context |
|---|---|
| Vivo | Remitted ₹62,476 crore (~50% of turnover) to China; ED-led PMLA probe under way. |
| OPPO & Xiaomi | Show-cause notices for duty evasion; details shared by Finance Minister in 2022. |
| RoC Report | ₹6,000 crore fund diversion flagged; tax fraud & suspicious transactions flagged with GST and tax authorities informed. |
| SFIO Probe | Formal investigation begun in March 2025; may take around one year; could lead to legal action based on findings. |
