HC directs vivo to give 950 cr to operate bank accounts

 Delhi High Court (HC) on Wednesday allowed Chinese smartphone manufacturer Vivo to operate its bank accounts after furnishing a bank guarantee of Rs 950 crore. The next hearing is likely on July 28.This comes after the Enforcement Directorate (ED) had frozen the bank accounts of the phone company and the HC had refused to unfreeze the accounts on July 8.The phone manufacturer had said the account freeze would hamper its ability to pay for its liabilities, such as taxes and employee salaries.After the last court order, the ED had asked Vivo to provide specific information supporting its claim that it currently has expenses of Rs 451 crore towards taxes, Rs 12 crore towards employee benefits, and Rs 2,363 towards operating expenses.Acting on ED’s orders, the company had sent details of its liabilities which are yet to be analysed fully by the enforcement agency. Justice Yashwant Varma on Wednesday granted ED one week to process the company’s liabilities.YES Bank, Bank of Baroda, HSBC Bank, ICICI Bank, Citibank, IDBI Bank, HDFC Bank, Standard Chartered Bank, and DBS Bank operate 10 accounts of Vivo in Gurugram, Noida, Delhi, and Mumbai.Vivo, in its petition, said the scope of the Prevention of Money Laundering Act is very wide in nature and the ED must specify in writing that it has ‘reasons to believe’ the company was guilty.Relying on various judgments, the company said the enforcement agency was encroaching on its rights and as a result, its 9,000 employees were left in the lurch.

The freeze is also depriving the exchequer of Rs 451 crore of statutory dues, it said.

The company stated before the court on Wednesday that it should be allowed to use the money not connected to the current searches. “Each day the ED takes to investigate the matter is slowly pushing us to our corporate death.Meanwhile, the ED said the proceeds of the crime were far greater than the Rs 250 crore lying in the accounts of the company, and by that logic, it could not unfreeze the accounts.

Hearing the arguments, the court directed the company to furnish a bank guarantee of Rs 950 crore. It also allowed the company to operate its bank account on the condition that a balance of Rs 250 crore be maintained in all of its accounts.Remittances to China should be disclosed to the ED, the court said.