The Delhi High Court has rejected the bail request of a Chinese national who was charged under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). The court observed that there appears to be a preliminary connection between the petitioner and the illicit gains acquired by Vivo Mobile India Pvt Ltd and its state distributor companies through the commission of various scheduled offenses.

Justice Swarana Kanta Sharma noted, "Based on the investigation, it was revealed that he was seemingly one of the key conspirators who, in collaboration with other Chinese individuals and entities, played a significant role in establishing numerous companies throughout the nation as part of a strategic plan to expand their influence across the country under the guise of legitimate business ventures. He was a participant in a more extensive criminal plot and therefore appears to be linked, on a preliminary basis, to the ill-gotten gains obtained by Vivo Mobile India Private Limited and its state distributor companies through the commission of various scheduled offenses."

The petitioner submitted a petition challenging the Sessions Court's remand order related to offenses punishable under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA) and also requested their release. According to the First Information Report (FIR), the Chinese shareholder of M/s. Grand Prospect International Communication Pvt. Ltd. (GPICPL) allegedly used counterfeit identification documents and fabricated addresses while presenting itself as a subsidiary of Vivo Mobiles India Pvt. Ltd. (Vivo), China. The complaint was filed by the Ministry of Corporate Affairs (MCA), and the Directorate of Enforcement (ED) had sought custody of the petitioner, which was granted by the court.

The petitioner argued that they had not been formally named as an accused in the aforementioned First Information Report (FIR), and furthermore, there were no specific allegations made against them in the FIR.

The court took note of the fact that the petitioner held a significant position within the Vivo company and played a crucial role in establishing the Vivo group's presence in the country. The court also observed that the petitioner maintained regular communication with various state distributors, including GPICPL. Additionally, the petitioner was found to be uncooperative with the investigation, as they failed to provide information regarding their entry into the country and details about their income during their stay.

"Taking into account the judgment of the Honorable Supreme Court in the case of V. Senthil Balaji (mentioned above), this court acknowledges that the investigating agency, i.e., the Directorate of Enforcement, provided the learned Sessions Court with sufficient evidence justifying the necessity for the custody of the accused. The learned Sessions Court had also determined that Section 19 of the Act had been duly adhered to, and only after this assessment were the accused individuals, including the petitioner, remanded to the custody of the Directorate of Enforcement," noted the court.

As a result, the court rejected the petitioner's petition.

Case: Guangwen Kuang @ Andrew v Directorate Of Enforcement & Anr, CRL.M.C. 7488/2023 & CRL.M.A. 27920/2023.