By Greg Gao

(JW Insights) Oct 12 -- Chinese smartphone maker Vivo said on October 11 that its India branch firmly adheres to its ethical principles and remains dedicated to legal compliance after India's financial crimes agency arrested a Chinese employee of Vivo in India.

"The recent arrest deeply concerns us. We will exercise all available legal options," the firm said.

This arrest further complicates the legal troubles for the Chinese smartphone manufacturer in India, as the tension between China and India continues to escalate. India is intensifying its scrutiny of Chinese companies and investments.

While two insiders confirmed that four Vivo employees have been arrested, during a court hearing for the appearance of these executives, the legal documents only mention the arrest of one Vivo employee, referred to as a Chinese citizen. The names and affiliations of the other three executives remain unclear.

These executives were arrested in connection with an ongoing 2022 case in which Indian authorities raided Vivo's offices, alleging money laundering. Vivo has repeatedly denied these allegations and stated its cooperation with authorities to provide all necessary information while being "committed to full compliance with the law."

Last week, Reuters reported that Indian police had formally accused Vivo of helping transfer funds illegally to NewsClick.

Vivo is the second-largest smartphone brand in India, holding a market share of 17% by shipment volume, trailing only behind Samsung, according to Counterpoint data.