SFIO to charge VIVO in ₹2,000 crore fund-diversion probe

India’s corporate-fraud watchdog, the Serious Fraud Investigation Office (SFIO), is preparing to file a chargesheet against smartphone maker Vivo India in an alleged fund-diversion case pegged at more than ₹2,000 crore. The move is part of a broader crackdown on Chinese handset brands over suspected financial irregularities running into thousands of crores.

What the investigation has found so far

The case stems from a Ministry of Corporate Affairs (MCA) directive asking SFIO to scrutinise the finances of Vivo, Oppo and Xiaomi after a Registrar of Companies (RoC) report flagged suspected diversion of funds of around ₹6,000 crore across multiple group entities. Investigators have since tracked money flows they believe show profits being moved out of India through a maze of related companies and layered transactions.

In Vivo’s case alone, officials say the alleged diversion has been quantified at over ₹2,000 crore. The probe points to structured movement of funds and possible use of intermediary entities that, on paper, appeared to be independent but in practice were closely linked to the handset maker’s ecosystem.

Charges under Section 447: why it matters

The SFIO is expected to invoke Section 447 of the Companies Act, 2013 — one of the strongest provisions available for dealing with corporate fraud. A case under this section can carry both civil and criminal consequences, including heavy monetary penalties and potential imprisonment for individuals found responsible.

Once the chargesheet is filed, the Registrar of Companies will decide the final quantum of penalty, based on the violations cited and the scale of the alleged diversion. That decision will be closely watched by foreign manufacturers operating in India, many of whom use complex group structures and cross-border transactions.

Part of a wider probe into Chinese smartphone brands

The scrutiny of Vivo is not happening in isolation. SFIO’s mandate covers three major Chinese brands — Vivo, Oppo and Xiaomi — with the wider inquiry examining suspected irregularities of more than ₹6,000 crore. For now, the investigation into Vivo is the most advanced, with probes involving the two other brands expected to take longer to reach the chargesheet stage.

The fund-diversion probe comes on top of earlier action by the Enforcement Directorate (ED), which has been investigating alleged money-laundering linked to large sums being routed out of India under the guise of imports and other business payments. Together, these cases signal a more aggressive stance by Indian authorities on opaque financial practices in the smartphone supply chain.

Impact on Vivo’s India business

Vivo remains one of India’s biggest smartphone players by shipment volumes, which makes the case significant for the broader electronics ecosystem as well. The company has deep linkages with local manufacturing, distribution and marketing partners, and any prolonged legal battle could increase compliance costs and slow down expansion plans.

The investigation also casts a shadow over proposed joint ventures and manufacturing restructurings involving Vivo and Indian partners, which are already subject to tighter scrutiny under foreign investment rules applicable to entities from certain neighbouring countries.

What comes next

Once SFIO’s chargesheet is filed, the legal process will shift to the courts, where Vivo is widely expected to challenge the findings. The outcome will shape not only the company’s regulatory future in India but also the compliance playbook for other multinational electronics brands whose financial structures rely heavily on related-party transactions and cross-border flows.

For policy-makers, the case offers an opportunity to signal how strictly India intends to enforce transparency, profit-shifting rules and corporate-governance standards in high-growth sectors such as smartphones and consumer electronics.