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Offices of Chinese smartphone manufacturer BBK Electronics' Vivo and its connected firms were raided on Tuesday by the Enforcement Directorate (ED), a senior government official and a business executive told Reuters.

The Vivo raids come months after the ED opened an inquiry into Xiaomi Corp., one of India's top smartphone vendors, for alleged unlawful payments made abroad "in the guise of royalty"

According to local media, the searches by the ED are a part of a probe into possible money laundering. Requests for comment from the Directorate and Vivo were not immediately fulfilled. Due to the investigation's secrecy, the sources declined to be identified.

Meanwhile Vivo has said that it is cooperating with authorities to provide them with all the required info. “As a responsible corporate, we're committed to being fully compliant with laws," Vivo said.

Xiaomi has denied any wrongdoing and claimed in court that when being questioned by representatives from the Directorate, its top executives were subjected to intimidation and threats of "physical violence" The claims were refuted by the agency.

A probe into Vivo was requested in April to determine whether there were any "significant irregularities in the ownership and financial reporting," according to a previous Bloomberg story. ZTE's books were also rumoured to be being examined.

Following tensions on the border between the two nations in 2020, which resulted in numerous rounds of negotiations, the surveillance of Chinese companies became more intense. Since then, more than 200 mobile applications, including TikTok, have been banned.

In May, Vivo Mobile Communications Co. and ZTE Corp. local divisions were being looked into for possible financial irregularities. Xiaomi Corp. has also been a target of the investigating agency's attention.

Contrary to data released by New Delhi, which claimed that India traded with the US more than any other nation last year, China had said in May that it remained India's top trading partner. It demonstrated a willingness to take action to enhance regular commerce with India by pointing out that the value of bilateral trade between China and India was $125.66 billion.

“The Chinese government is closely following the situation. The Chinese government always asks Chinese companies to abide by laws and regulations when doing business overseas," HT earlier quoted Zhao Lijian, a spokesperson for the Chinese foreign ministry, as addressing the investigation into ZTE and Vivo.

“In the meantime, we firmly support Chinese companies in safeguarding their legal rights and interests. The Indian side should act in accordance with laws and regulations and provide a fair, just and non-discriminatory business environment for Chinese companies operating in India."

(With agency inputs)

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