Vivo PMLA case: Delhi HC issues notice to ED on Lava MD Hariom Rai's plea seeking extension of interim bail

New Delhi [India], May 9 : The Delhi High Court on Thursday issued a notice to the Directorate of Enforcement (ED) on a petition moved by the managing director of Lava International, Hariom Rai, seeking an extension of his interim bail.
Rai was granted three months of interim bail by the court in February on health grounds. However, the term of his bail ended on May 15.
Senior Advocate Vikas Pahwa, appearing for Hariom Rai, stated that there is a requirement for an extension of bail for six months, as he is battling a serious heart problem.
Rai has already submitted medical documents from AIIMS, which could be verified by the ED, senior advocate Pahwa stated.
Noting the submissions, the bench of Justice Swarna Kanta Sharma sought a response from the ED and listed the matter for a further hearing on May 13.
Rai was arrested by the ED in connection with a Prevention of Money Laundering Act (PMLA) case related to Chinese mobile phone manufacturing company Vivo.
Earlier, the Delhi High Court, while granting three months' interim bail to Hariom Rai, said, "This court is of the considered opinion that the applicant's health condition is of such nature that it would fall within the category of sick under Section 45 of PMLA and he must be given an opportunity to get himself treated in the hospital of his choice."
The delicate balance between life and death in cardiac emergencies underscores the importance of prioritising and requiring specialised care in such cases, to mitigate the profound risks posed by these medical conditions, the court noted.
Each passing moment in the face of cardiac distress is fraught with the peril of irreversible harm and in case of any eventuality that may occur in the applicant not getting proper and specialised treatment, this court will have to bear the weight of regret, it added.
The court further noted that the applicant is aged about 57 years, and is 'admittedly suffering from heart-related issues including angina and has been advised coronary angiography, and the same is clearly discernible from all the medical reports filed by the jail superintendent himself".
"Even otherwise, the life-threatening nature of coronary artery disease or cardiac-related issues cannot be equated with other categories of illnesses. Such medical conditions have the potential to precipitate life-threatening events at any moment, and thus, they stand unparalleled in their urgency and criticality," the court stated.
Senior Advocate Vikas Pahwa, with fellow advocates Abhay Raj Varma, Arjun Rekhi, P. Rathi, Namisha and. Sanskriti S. Gupta appeared for the applicant, Rai, in the matter.
Earlier, Rai, through his plea, said since Vivo China wanted to enter India, the applicant met with Shen Wei, the CEO of the company, in 2013.
At the time, Vivo and the applicant, LAVA, were contemplating a joint venture as part of which 25 per cent shares were to be held by the latter.
However, the venture never happened as Vivo decided to independently conduct its business in India.
"Negotiations and business talks between the applicant and the representatives of Vivo China failed and did not meet a fruitful end, due to which the applicant stopped pursuing the said opportunity and had nothing to do with Vivo China and/or its representatives after 2014. Merely because, over the years, the international relations between India and China have deteriorated, it would not mean that the applicant committed an offence at the relevant time when there were, in fact, friendly business relations between the two countries," read the plea on the behalf of the applicant.
According to the ED, certain Chinese shareholders of Grand Prospect International Communication Private Ltd. incorporated the company on the basis of forged identification documents and falsified addresses.
During the course of the inquiry, certain fraudulent activities were detdcted by the Ministry of Corporate Affairs. The company was not reported as a subsidiary of Vivo in the official records, while publicly projecting itself to be a subsidiary of Vivo, said ED.
The agency further alleged that the director and share holder Zhang Jie used a fake driving licence to apply for Director Identification Number (DIN) for giving his Shillong address and also used it to open the bank account.
An FIR for cheating was registered at Delhi's Kalkaji police station under IPC sections 417, 120B and 420. A separate FIR was filed under IPC sections 417, 420, 468, 471 and 120B by the Economic Offence Wing of Delhi Police on the basis of a complaint filed by Manjit Singh, the then deputy registrar of companies, Ministry of Corporate Affairs, NCT of Delhi.
ED further alleged that soon after the incorporation of M/s Vivo, India, 19 more companies, including M/s GPICPL, were incorporated across India, completely controlled by Chinese nationals.
The accused, Bin Luo, was the founder and first director of Vivo India, GPICPL and all other 18 entities at the time of their incorporation and the accused, Nitin Garg, assisted in the incorporation of most of the companies of Vivo Group.
According to the ED, raids were carried out on the premises of the accused on October 9 and cash amounting to more than Rs 10 lakh was seized and four accused arrested. The accused were identified as Guangwen Kyang aka Andrew Kuang, a Chinese national, Hari Om Rai, the MD of Lava International, Rajan Malik, and Nitin Garg, a chartered accountant.
The probe revealed that the PMLA investigation by the ED was initiated following the registration of a money laundering case on February 3, 2022.