Vivo money laundering case: Delhi court grants bail to CA Rajan Malik

Delhi's Patiala House court has granted bail to Rajan Malik, a chartered accountant (CA) arrested by the Enforcement Directorate (ED) in a money laundering case filed against Chinese smartphone manufacturer, Vivo.

Additional Sessions Judge Kiran Gupta granted bail after considering Malik's age, his lack of criminal antecedents and given that he has been in prison for the last year.

"The applicant is old aged person as he is 61 years old and is suffering from various ailments; does not have a criminal record and no criminal case is pending against him except the present case; he is in custody for the last one year, this Court is satisfied that there are reasonable grounds for believing that the applicant is not guilty of the offence and that he is not likely to commit any offence while on bail," the order said.

The court granted bail subject to Malik furnishing a personal bond of ₹2 lakhs with two sureties of the like amount, one surety being from a close family member.

The case against Vivo was filed by the Delhi Police in 2021. The case reportedly involves allegations that the Chinese phone manufacturer used shell companies to remit money outside India between 2014 and 2021. The ED later registered a money laundering case in the matter.

The ED claimed that Vivo was helped by Indian smartphone manufacturer, Lava International, to set up and expand Vivo's business in India. For this, funds were allegedly arranged for Vivo through a corporate entity known as Labquest Engineering Private Limited. 

CA Malik is alleged to have been the beneficial owner of Labquest. He is said to have been introduced to Vivo India's CEO and CFO, Ye Liao and Luis, who came to India, supposedly to set up Vivo India, on a visa invitation from Lava International.

Along with Lava's Managing Director, Hari Om Rai (co-accused), Malik was accused of playing a key role in the money laundering scheme by using Labquest to provide financial support for securing office space, and apartments for Chinese nationals associated with Vivo.

Labquest was allegedly set up to bypass foreign direct investment (FDI) regulations while carrying out these activities.

CA Malik, however, maintained that he had no involvement with the visas or the invitation letters issued to the various Chinese nationals.

While arguing for bail, Malik's counsel contended that there was no evidence linking Malik to the incorporation of Vivo or any other related entity. He further stated that no evidence had been presented to suggest that Malik had any intention to assist Vivo in committing the offence of money laundering by establishing and expanding its business.

The court noted that Malik's services (as per the emails relied upon by ED) were in the nature of professional services. The court added that even going by witness statements, it could not be said at this stage that Malik was the mastermind or a key person behind the alleged money laundering scheme.

"The applicant is a CA and nothing has been brought to the notice that he has done something which was beyond his scope of profession i.e. he indulged in some activities which are totally unconnected with the Chartered Accountancy," the court concluded.

It proceeded to grant Malik bail.

Advocates Hemant Shah, Mohit Kumar Gupta, Harsh Yadav and Saurabh Pal appeared for Malik. Public Prosecutor Manish Jain and Simon Benjamin, along with Advocate Snehal Sharda appeared for the ED.

[Read Order]