New Delhi [India], September 24 : Delhi's Patiala House Court on Tuesday dismissed the bail plea of Hari Om Rai. He is an accused in Vivo mobile Money laundering case.
It alleged that after the incorporation of Vivo group of companies and its SDCs, Vivo India has remitted funds outside India to the tune of Rs 70,837 crore, out of the total funds of Rs 71,625
Crores accumulated by them from sale of goods in the period from January 2015 to March 2021. The imports were made by Vivo India from entities based in Hong Kong, Samoa and British Virgin Islands.
Additional Sessions Judge (ASJ) Kiran Gupta dismissed the bail plea after hearing submissions and considering the facts of the case, seriousness of the allegations against Rai.
"Considering all the facts and circumstances, the nature of allegations and the past Conduct of the applicant, no ground for grant of bail is made out at this stage. Accordingly, the present bail application is dismissed," ASJ Gupta ordered on September 24.
The court said that it is pertinent to mention that the applicant was earlier granted concession of interim bail on medical grounds by the Hon'ble High Court of Delhi on February 16, 2024, however, the applicant misused the same and created false and fabricated documents by sending an imposter for procuring favourable medical reports, which were to be submitted before High Court of Delhi. An FIR on May 17, 2024, has been registered at police station (PS) Hauz Khas in this regard.
"Thus, from the past conduct of the applicant, the possibility of applicant tampering with evidence cannot be ruled out, if, he is released on bail, as some of the witnesses are his employees or employees of his company. Thus, the Court is of the opinion that the applicant does not fulfil the triple test for the grant of bail also," ASJ Gupta observed in the order.
It was argued by the counsel for the accused that he has already remained in JC for almost an year and that Article 21 shall have precedence over the twin condition under Section 45 PMLA.
This was the first application of the accused seeking regular bail on merits. It was submitted that the applicant is the co-founder, chairman and MD of Lava International Ltd. (Lava), the court noted in the order.
It was stated by the counsel that in the entire complaint, there is no allegation or role ascribed to the applicant in relation to the commission of the alleged scheduled offences. He is not an accused in the FIR.
There is not a single allegation that applicant/Lava had a single transaction in the bank account used to collect the alleged proceeds of crime or with Vivo or its distributor companies, the counsel said.
He added that there is no allegation that the applicant ever dealt with or received, in any manner whatsoever, the alleged Proceed of Crime (PoC). Neither the applicant nor Lava had anything to do with the visas obtained by 193 Chinese nationals from 2015 onwards.
It was also argued that invitations were issued by Vivo India or its distributor companies and not by the applicant/Lava. The applicant was not in any manner involved in the incorporation of Vivo, its SDCs or any other related entity.
ED filed a reply opposing the bail application and submitted that from the prosecution complaint and the evidence/material available on record, the offence of money laundering has been clearly made out against the applicant, who knowingly involved himself in the process and activities related to the offence of money laundering.
Special public prosecutors Manish Jain and Simon Benjamin along with Advocate Snehal Sharda appeared for ED and stated that VIVO China and others devised a complex scheme for setting up of VIVO Group of Companies in India in a fraudulent manner without revealing its true beneficial ownership before the authorities of the Government of India.
They resorted to violations of the laws of India by resorting to cheating, forgery violations of FDI policies, visa rules, etc. with malicious intent. The VIVO Group Companies acquired proceeds of crime, which were subsequently used for expansion of VIVO footprints, controlling the supply chain in the country and syphoning off the funds to foreign companies that were also owned/controlled by VIVO China, ED argued.
ED's SPPs argued that to conceal the Chinese ownership of VIVO India and the 23 SDCs, VIVO India was set up to pass through entries. It was projected that VIVO India is a subsidiary of a Hong Kong based company, viz. Multi Accord Ltd.; however, investigation has established that it was under the ultimate control of VIVO China.
This complex corporate structure setup in a fraudulent manner was then used to launder the funds outside India under the garb of import of goods. They were controlled by a single entity, i.e. Vivo China. The foreign entities to which the funds were transferred in lieu of imports were also under the control of VIVO China.
On the role of Rai, it was stated that during the investigation, it has been established that Vivo China, with the active aid and assistance of Hari Om Rai, MD of Lava International Ltd., along with a co-accused, used an Indian company, namely M/s Labquest Engineering Pvt. Ltd., as a front for establishing their network of companies in India and for carrying out activities that were not permitted otherwise and violated the FDI policy.
It was also argued by the ED that the Chinese Nationals have used an Indian entity, namely Lava International, which belongs to the applicant, to get invitation letters to avoid any suspicion. The applicant not only provided invitation letter to these Chinese nationals in 2013 but he and his company, Lava International, had also provided necessary logistical and ground support to these Chinese nationals for conducting market survey of the Indian market.
The applicant and his company had issued invitation letters for obtaining visas for at least 19 Chinese nationals from Mvo China and its associated companies based in China for the purpose of incorporation of Vivo India and other SDCs. He gave visa invitation to Ye Liao alias Jacky, who had set up Vivo India; Guangwen Kuang alias Andrew, who had set up Vivo India and other SDCs; Xu Daohe and Luo Bin, who was the first Director of Vivo India and its SDCs, the ED said.