‘Baseless… untrue’: ED on Xiaomi’s claims employees faced threats of ‘violence’

‘Baseless… untrue’: ED on Xiaomi’s claims employees faced threats of ‘violence’

The Enforcement Directorate has slammed Chinese smartphone maker Xiaomi’s claim – that its officers had threatened employees and their families with violence – as ‘baseless’. The ED also rubbished Xiaomi claims that statements by its India employees were recorded ‘under coercion’ and that the charges – relating to violations of the foreign exchange act – were an ‘afterthought’.

In a statement issued Saturday the Enforcement Directorate stressed that it 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’.

“Allegations statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless…  officials of Xiaomi India deposed their statements before ED under FEMA voluntarily in the most conducive environment on various occasions,” the agency was quoted by news agency PTI.

The Enforcement Directorate also said the statements were recorded on the basis of documents and information provided by the company during the course of its investigation. “Their statements corroborate with the written replies submitted to ED and the material on record,” the agency said.

Xiaomi made the claims – that its top executives faced threats of ‘physical violence’ and coercion during questioning – in a May 4 filing before the Karnataka high court that news agency Reuters said it had seen.

China’s Xiaomi accuses ED of ‘violence’ threats during probe: Report

According to the filing, ED officials warned ex Xiaomi India head Manu Kumar Jain and current chief financial officer Sameer BS Rao, and their families, of ‘dire consequences’ if they did not submit statements as desired by the agency. 

ED summons former India head of Xiaomi in investigation – Report

Jain’s and Rao’s statements were recorded between March 25 and April 26.

Xiaomi has been under investigation for four months now, over claims of sending money to three foreign entities in the guise of royalties. 

Last week the ED seized 5,551.27 crore from bank accounts of the smartphone makers in connection with the ‘illegal outward remittances’.

ED seizes 5,551 cr from Chinese smartphone giant Xiaomi’s accounts

The order, however, has since been stayed by the Karnataka high court.

Xiaomi told Reuters the company abides by all Indian laws and is ‘fully compliant with all the regulations’. “We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information.”

Xiaomi was India’s top smartphone seller last year, with a 24 per cent market share.

With input from PTI, Reuters

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