Xiaomi’s allegations of coercion baseless, afterthought: Enforcement Directorate | India News

NEW DELHI: Rebutting alleged claims of Chinese smartphone manufacturer Xiaomi that its top executives were threatened of ‘physical violence’ while recording their statements under coercion, the Enforcement Directorate has said that all such statements are baseless and untrue.
“The allegations that the statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless. The officials of the Xiaomi India deposed their statements before ED under FEMA voluntarily in the most conducive environment on various occasions,” the agency said in a statement issued on Saturday.
According to reports in a wire agency, quoting from Xiaomi’s court filings of May 4, officials of the ED had threatened Xiaomi’s former managing director Manu Kumar Jain and its current chief financial officer Sameer BS Rao and their families of dire consequences if they did not give statements as desired by the agency.
The ED has, however, said that both Jain and Rao had deposed before the agency and gave statements ‘voluntarily’ and their statements were based on the documents and information provided by the company during the course of investigation.
“Their statements corroborate with the written replies submitted to ED and the materials on record,” the agency said. While Manu Jain appeared before the ED four times between April 13 and 26, statements of Rao were recorded over six days between March 25 and April 26.
The ED said that “no complaint was filed by them at any point of time during recording of statements at various occasions. Last statement of the officials of the company was recorded on April 26 and the seizure order (of Rs 5,551 crore) was passed on April 29”. It appears that the allegation now made after passage of substantial time is an afterthought. The allegations are baseless and far from the facts, the agency said.
It is reiterated that 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, the statement further said.
On April 29, the ED had seized Rs 5,551 crore in bank accounts of Xiaomi India for violating foreign exchange management act (FEMA) rules where, according to ED, the Chinese phone maker had illegally remitted an equivalent amount out of the country.
“Under the cover of various unrelated documentary façade created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitute violation of Section 4 of the FEMA. The Company also provided misleading information to the banks while remitting the money abroad,” the ED had then said.
The ED began its investigation against Xiaomi in February this year and has tracked the company’s outward remittances since 2014 when it started the India operations. The probe revealed that Xiaomi India allegedly procures all its mobile sets and other products from the manufacturers in India and had availed no services from the three foreign based entities to whom it had made such huge remittances.

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