Today, On 14th May, The Delhi High Court set to make a decision regarding the extension of interim bail for Hari Om Rai, the Managing Director of Lava International. Rai’s bail status currently under review by the court, with a decision pending on whether to extend it further. This legal development likely pertains to ongoing legal proceedings involving Rai, and more details may emerge after the court’s decision.
New Delhi: The Delhi High Court reserved its decision regarding the extension of interim bail for Lava’s Managing Director, Hari Om Rai, on medical grounds. Rai arrested by the Enforcement Directorate (ED) in a money laundering case involving the Chinese mobile company Vivo. Initially, he granted three months of interim bail on February 16, which is set to expire on May 15. Rai seeking a six-month extension of the interim bail due to his heart condition.
During the hearing, Justice Swarana Kanta Sharma listened to the arguments presented by both the petitioner and the Enforcement Directorate. Senior advocate Vikas Pahwa represented Rai and emphasized that Rai’s health is deteriorating, making him vulnerable to potential heart failure. Pahwa cited a report from Max Hospital, which indicated a complete blockage in one of Rai’s arteries. Justice Swarana Kanta Sharma reserved the order while stating that if necessary, a medical report would be obtained from AIIMS (All India Institute of Medical Sciences).
The petitioner’s counsel informed the court that medical documents from AIIMS had been provided and needed to be verified by the ED. On February 16, the High Court granted Rai three months of interim bail based on his health condition. Rai’s arrest by the Enforcement Directorate, in connection with a case under the Prevention of Money Laundering Act (PMLA) concerning Vivo, the Chinese mobile company.
The High Court, upon granting interim bail, stated,
“This Court is of the considered opinion that the applicant’s health condition qualifies as sick under Section 45 of the PMLA, warranting his treatment in the hospital of his choice.”
The court emphasized the critical need for prompt and specialized care in cardiac emergencies, stating,
“In cardiac emergencies, the fine line between life and death highlights the necessity of prioritization and specialized care to mitigate significant risks. Every moment of cardiac distress carries the threat of permanent damage, and should the applicant fail to receive appropriate treatment, the burden of regret will rest upon this Court.”
The Delhi High Court further noted,
“The applicant, who is approximately 57 years old and is known to suffer from heart conditions such as angina, has been recommended for coronary angiography. This is evident from the medical reports submitted by the jail Superintendent himself.”
The court stated,
“In the opinion of this Court, the life-threatening nature of coronary artery disease and other cardiac-related issues stands distinct from other types of illnesses. These conditions can lead to life-threatening events at any time, making them uniquely urgent and critical in nature.”
Senior Advocates Vikas Pahwa, along with advocates Abhay Raj Varma, Arjun Rekhi, P. Rathi, Namisha, and Sanskriti S. Gupta, represented the applicant, Hariom Rai.
Previously, the trial court had denied interim bail to Hariom Rai, stating,
“Based on the medical reports from the Jail Superintendent, this Court believes that the applicant does not suffer from any life-threatening condition or disease that poses a danger to his life or that cannot be treated within the confines of the jail. He has received treatment for every health issue he has reported while in judicial custody.”
The court stated,
“The applicant does not meet the criteria of being ‘sick’ or ‘infirm’ as defined in the proviso to Section 45(1) of the PMLA. Therefore, the request to release the accused on medical grounds under this provision is hereby dismissed.”
Hariom Rai, in his plea, stated that in 2013, he met with Shen Wei, the CEO of Vivo China, as Vivo China expressed interest in entering the Indian market. At that time, there were discussions about a joint venture between Vivo and Rai’s company, LAVA, where Rai’s company would hold a 25% stake. However, this joint venture never materialized, and Vivo decided to independently operate in India. Rai mentioned that negotiations and business talks between him and the representatives of Vivo China failed to reach a successful conclusion.
After 2014, Rai stopped pursuing any opportunities related to Vivo China and its representatives. Rai argued that even though the international relations between India and China have deteriorated over the years, it does not mean that he committed an offense when there friendly business relations between the two countries.
According to the Enforcement Directorate (ED), certain Chinese shareholders of Grand Prospect International Communication Private Ltd. (GPICPL) incorporated the company using forged identification documents and falsified addresses. The Ministry of Corporate Affairs discovered fraudulent activities during its investigation. GPICPL claimed to be a subsidiary of Vivo in its public representation but was not reported as such in official records.
The ED also alleged that Zhang Jie, a director and shareholder, used a false driving license to obtain a Director Identification Number (DIN) and open a bank account, using a fake address in Shillong. Two FIRs registered against the accused, one by the Delhi Police’s Economic Offence Wing and another by the Kalkaji Police Station in South East Delhi, under various sections of the Indian Penal Code (IPC).
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The ED further revealed that after the incorporation of Vivo India, 19 more companies, including GPICPL, were incorporated in India, all of which were completely controlled by Chinese nationals. Bin Luo, the founding director of Vivo India and GPICPL, was involved in the incorporation of all the entities, and Nitin Garg, a chartered accountant, assisted in incorporating most of the companies within the Vivo Group.
The Enforcement Directorate conducted raids on the accused’s premises on October 9th and seized cash amounting to over Rs 10 lakhs. Four individuals, including Guangwen Kyang (also known as Andrew Kuang), a Chinese national, Hari Om Rai, the MD of Lava International, Rajan Malik, and Nitin Garg, a Chartered Accountant, were arrested.
The ED initiated a money laundering investigation under the Prevention of Money Laundering Act (PMLA) on February 3, 2022.