Xiaomi accuses ED of ‘physical violence, threats’ during questioning

Xiaomi office in India. Photo: [Twitter/ Xiaomi India]

New Delhi: Xiaomi, a Chinese Smartphone company, has alleged its top executives faced threats of “physical violence” and coercion during questioning by India’s financial crime fighting agency Enforce Directorate, Reuters reported quoting a court filing.

Last week, the Enforcement Directorate claimed to have seized Rs 5,551.27 crore of telecom firm Xiaomi India lying in their bank accounts under the provisions of the Foreign Exchange Management Act, (FEMA) 1999, in connection with the illegal outward remittances made by the company.

However, Xiaomi denied any wrongdoing, saying its royalty payments were legitimate. On Thursday, a judge heard Xiaomi lawyers and put on hold the Indian agency’s decision to freeze bank assets. The next hearing is set for May 12.

As per the report, ED officials have warned the company’s former India managing director, Manu Kumar Jain, current Chief Financial Officer Sameer B.S. Rao, and their families of “dire consequences” if they did not submit statements as desired by the agency, Xiaomi’s filing dated May 4 stated.

The company alleges intimidation by India’s premier enforcement agency when executives appeared for questioning multiple times in April, the news agency reported.

Jain and Rao were on certain occasions “threatened … with dire consequences including arrest, damage to the career prospects, criminal liability and physical violence if they did not give statements as per the dictates of” the agency, the report said quoting the filing in the High Court of southern Karnataka state.

The executives “were able to resist the pressure for some time, (but) they ultimately relented under such extreme and hostile abuse and pressure and involuntarily made some statements,” it added.

Many Chinese companies have struggled to do business in India due to political tensions following a border clash in 2020. India has cited security concerns in banning more than 300 Chinese apps since then and also tightened norms for Chinese companies investing in India.


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