BENGALURU: The Directorate of Enforcement (ED) has refuted allegations made by Xiaomi India officials that their statements were taken under coercion by the ED. Calling the allegations “untrue and baseless,” the Central agency stated that the officials of Xiaomi India had deposed before the ED under the Foreign Exchange Management Act (FEMA) 1999.
The ED stated that the statements were made “voluntarily in the most conducive environment.” The agency’s clarification comes in the wake of allegations reportedly made by the top executives of Xiaomi India. They had alleged that they faced threats of “physical violence” and “coercion” during questioning by the ED.
On Thursday, the vacation bench of Justice Hemant Chandangoudar, in an interim order, stayed the ED order dated April 29, by which it had seized Rs 5,551.27 crore of Xiaomi Technology India Private Limited under the provisions of FEMA, subject to the condition that the petitioner (Xiaomi Technology India Pvt Ltd) should operate the bank accounts, which are seized under the impugned order only for the purpose of meeting the expenses for carrying out the day-to-day activities of the company.
The next hearing was adjourned for May 12. The ED had last week seized 5,551.27 crore ($725million) lying in the company’s India bank accounts, saying it had made illegal remittances to three foreign-based entities, including one Xiaomi group entity “in the guise of royalty” payments.
“No complaint was filed by them at any point of time during recording of statements at various occasions. It appears that allegation now made after passage of substantial time is an afterthought,” the ED stated. Xiaomi India, meanwhile, has denied any wrongdoing and had earlier stated that its royalty payments “are all legit and truthful” and the payments were made for “in-licensed technologies and IPs used in our Indian version products.”