According to a media source on Thursday, the government is probably going to suggest looking into the financial records of Beijing-based smartphone manufacturer Vivo and Chinese automaker MG Motor India.
The company’s auditor, Deloitte, and directors were called before the Ministry of Corporate Affairs (MCA)’s registrar of companies (RoC) earlier in November to provide an explanation about some audit errors that were found during the investigation.
India’s move increases the level of scrutiny India applies to Chinese businesses doing business there.
In its first year of business in India, MG Motor India received a notification from the government asking for an explanation of the losses incurred in the 2019–2020 fiscal year.
After MG Motor India’s financial accounts were examined, it was discovered that there were anomalies such as suspected tax fraud, questionable related-party activities, and disparities in invoicing.
In response to the government’s action, the automaker emphasized that it is a law-abiding business that values openness and that it would always uphold the highest standards of governance and compliance.
In their statement, it said that “no automobile company can be profitable in its very first year of operations.”
According to a report by Business Television, which referenced court records and attorneys involved in the case, the Enforcement Directorate (ED) detained four Vivo industry officials last month in connection with a suspected money laundering scheme.
The president and managing director of MG Motor India said earlier this year that the business hopes to turn a profit in the 2024 fiscal year.
