India Reveals Hidden Chinese Company Ownership, Restricts Operations

In a first-of-its-kind operation, the registrar of companies (RoC) in Delhi has banned Metec Electronics from doing business with certain Chinese or Hong Kong entities after discovering that a suspected Chinese person named Jiangping Hu secretly helmed the company. Hu likely used hidden ownership structures to avoid disclosing his true stake in the company, with Chinese-sounding names like Chen Feiyan listed as owners.

The authorities have also found that the company has not made a proper filing and concealed its suspicious connections to Chinese companies and a Hong Kong entity by listing them as suppliers despite using similar trademarks. The new development has paved the way for further investigation extending to other Chinese companies.

Noticing that Metec Electrnonics had not filed its board minutes properly, the RoC initiated an investigation, which further revealed that the company official had little knowledge of the operations, which were largely looked after by four Chinese nationals, including one Jiangping Hu. The letterheads bearing the insignia of “Meisen” and “Miso” showed its connection with China.

Moreover, they sought to register trademarks in India that were similar to what they owned in China. Besides, in its filings for FY 22, the Indian entity showed three Chinese suppliers as “entities under common control” while listing three individual shareholders: Chen Feiyan (75.69%), Yang Wen (24.3%) and Vikash Bharadwaj (0.01%).

However, the authorities have yet to find the motive behind hiding “significant beneficial ownership,” a disclosure that companies must make under the law in cases where the ownership of an entity is over 10%. The decision may lead to criminal action and a similar scrutiny of other Chinese-owned or controlled entities in the country, a report said.