The Enforcement Directorate (ED) on Saturday, 7 May, issued a statement, denying allegations that the statement of the officials of Xiaomi India was taken under coercion by the agency.
The Chinese smartphone had reportedly alleged that its top executives were dealt with threats of “physical violence” and coercion during questioning by the ED, reported Reuters.
According to the report, the agency had warned the company’s former India managing director, Manu Kumar Jain, current Chief Financial Officer Sameer BS Rao, and their families of “dire consequences” if statements were not submitted.
The ED had last week seized Rs 5551.27 crore of the company under the provisions of Foreign Exchange Management Act, 1999 in connection with alleged illegal outward remittances made by it.
However, on 5 May, the Karnataka High Court had stayed the agency's 29 April order under which it seized the amount.
Untrue & Baseless: ED Denies Allegations
In Saturday's statement, the ED called the allegations "untrue and baseless", saying the the officials provided their statements "voluntarily in the most conducive environment on various occasions".
It said that statements had been taken from two top executives of the company between 13 and 26 April and no complaint had been filed by them after that.
"It appears that allegation now made after passage of substantial time is an afterthought. The allegations are baseless and far from the facts," the ED said.
ED is a professional agency with strong work ethics and there was no coercion or threat to the officers of the company at any point of time.Statement by Enforcement Directorate
ED Seizes Assets of Xiaomi
"ED has seized Rs 5551.27 Crore of M/s Xiaomi Technology India Private Limited lying in the bank accounts under the provisions of Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company," the ED said in a statement.
As per the agency, Xiaomi began its operations in India in 2014 and by 2015, had started remitting the money.
It added, "The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi group entity, in the guise of royalty," Business Standard quoted.
As per the mobile company, their move was based on instructions of their Chinese "parent group" entities. The amount paid to other two US-based entities were also for the profit of Xiaomi group entities.
However, the ED reportedly added that the manufacturers have not availed any service from the three entities involved in the transaction.
Karnataka High Court Stays ED Action
The Karnataka High Court meanwhile on 5 May, stayed the ED's order under which it seized the Rs 5,551.27 crore from the company.
Justice Hemant Chandangoudar on Thursday stayed the ED order, subject to the condition that the petitioner operates the bank accounts which are seized under the impugned order for the purpose of carrying out the day to day activities of the company, reported IANS.
The matter has been posted for further hearing to 12 May.
(With inputs from Business Standard, IANS and Reuters.)
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