ED’s probe on Xiaomi: China calls for a fair & non-discriminatory environment for its firms in India

The allegations that the statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless, said ED in statement

Team PGurus

May 9, 2022

The allegations that the statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless, said ED in statement

ED denies Xiaomi’s ‘coercion’ allegation as ‘untrue and baseless’

Expressing displeasure, China on Monday expressed hope that India will provide a “fair, just and non-discriminatory environment” to its companies as it reacted guardedly to reports of top executives of Chinese smartphone maker Xiaomi faced a probe by the Enforcement Directorate regarding its remittances abroad. “China is closely following the situation,” Chinese Foreign Ministry spokesman Zhao Lijian told a media briefing in Beijing, responding to a question on top Xiaomi executives’ allegation of “physical violence and coercion” by the Enforcement Directorate (ED) in its investigations into its remittances.

“We hope India will provide a fair, just, and non-discriminatory business environment for Chinese companies, conduct investigation, and law enforcement in accordance with laws and regulations so as to increase the confidence of global investors,” Zhao said. According to the news agency PTI report, Zhao said the Chinese government always asks its companies to abide by laws and regulations while doing business overseas. “But at the same time it firmly supports the Chinese companies in upholding their lawful rights and interests,” he said.

Xiaomi is accused of making illegal remittances abroad “in the guise of royalty” payments. Previous week India’s anti-money laundering agency Enforcement Directorate (ED) seized Rs.5,551 crore from Xiaomi’s Indian subsidiary firms for foreign exchange violations.[1]

The ED on Saturday rejected as “baseless” the allegations that the statements of Xiaomi India officials, the wholly-owned subsidiary of Chinese mobile manufacturing company Xiaomi, were recorded “under coercion“, saying the charges were an afterthought. The agency was responding to certain news reports that said Xiaomi alleged in a recent filing before the Karnataka High Court that its top executives were threatened with “physical violence and coercion” during their questioning by ED investigators in Bengaluru.

The ED issued a statement saying it was “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 allegations that the statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless,” the ED statement said.

The Karnataka High Court earlier this week stayed this ED order. Xiaomi is a trader and distributor of mobile phones in India under the brand name MI.

Reference:

[1] ED seizes Rs.5,551 crore of Chinese mobile phone manufacturer Xiaomi for forex violations in India – Apr 30, 2022, PGurus.com

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