Exclusive: Xiaomi accuses Indian agency of 'physical violence' threats during probe

Exclusive: Xiaomi accuses Indian agency of ‘physical violence’ threats during probe

  • Xiaomi India going through India probe over royalty bills
  • Xiaomi received court docket aid, however accuses company of threats-document
  • Corporate says pros threatened with ‘dire penalties’-document
  • India says Xiaomi made overseas bills in ‘guise of royalty’

NEW DELHI, Would possibly 7 (Reuters) – Chinese language smartphone maker Xiaomi Corp 1810.HK has alleged its most sensible executives confronted threats of “physical violence” and coercion right through wondering by means of India’s monetary crime preventing company, in step with a court docket submitting noticed by means of Reuters.

Officers from the Enforcement Directorate warned the corporate’s former India managing director, Manu Kumar Jain, present Leader Monetary Officer Sameer B.S. Rao, and their households of “dire consequences” if they didn’t publish statements as desired by means of the company, Xiaomi’s submitting dated Would possibly 4 said.

After the Reuters tale used to be printed, the Enforcement Directorate issued a remark pronouncing Xiaomi’s allegations had been “untrue and baseless” and corporate executives had deposed “voluntarily in the most conducive environment”.

Check in now for FREE limitless get admission to to Reuters.com

Xiaomi has been underneath investigation since February and final week the Indian company seized $725 million within the corporate’s India financial institution accounts, pronouncing it made unlawful remittances in another country “in the guise of royalty” bills. (Complete Tale)

Xiaomi has denied any wrongdoing, pronouncing its royalty bills had been legit.

On Thursday, a pass judgement on heard Xiaomi legal professionals and placed on grasp the Indian company’s resolution to freeze financial institution property. The following listening to is about for Would possibly 12. (Complete Tale)

The corporate alleges intimidation by means of the enforcement company when executives gave the impression for wondering more than one instances in April.

Jain and Rao had been on sure events “threatened … with dire consequences including arrest, damage to the career prospects, criminal liability and physical violence if they did not give statements as per the dictates of” the company, in step with the submitting within the Top Court docket of southern Karnataka state.

The executives “were able to resist the pressure for some time, (but) they ultimately relented under such extreme and hostile abuse and pressure and involuntarily made some statements,” it added.

In its media remark, the Enforcement Directorate mentioned this can be 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”.

Xiaomi declined to remark mentioning pending prison court cases. Jain and Rao didn’t reply to Reuters queries.

Jain is now Xiaomi’s international vice chairman based totally in Dubai and is credited with Xiaomi’s upward push in India, the place its smartphones are massively standard.

Xiaomi used to be the main smartphone dealer in 2021 with a 24% marketplace proportion in India, in step with Counterpoint Analysis. It additionally sells different tech units together with sensible watches and televisions, and has 1,500 workers within the nation.


Many Chinese language corporations have struggled to do industry in India because of political tensions following a border conflict in 2020. India has cited safety issues in banning greater than 300 Chinese language apps since then and in addition tightened norms for Chinese language corporations making an investment in India.

Tax inspectors raided Xiaomi’s India places of work in December. On receiving data from tax government, the Enforcement Directorate – which probes problems reminiscent of foreign currency legislation violations – began reviewing Xiaomi’s royalty bills, court docket paperwork display.

The company final week mentioned Xiaomi Generation India Non-public Restricted (XTIPL) remitted foreign currencies identical to 55.5 billion rupees ($725 million) to entities in another country even if Xiaomi had “not availed any service” from them.

“Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities,” the company mentioned.

Xiaomi’s court docket submitting alleges that right through the investigation, Indian company officers “dictated and forced” Xiaomi India CFO Rao to incorporate a sentence as a part of his remark “under extreme duress” on April 26.

The road learn: “I admit the royalty payments have been made by XTIPL as per the directions from certain persons in the Xiaomi group.”

An afternoon later, on April 27, Rao withdrew the remark pronouncing it used to be “not voluntary and made under coercion”, the submitting presentations.

The directorate issued an order to freeze property in Xiaomi’s financial institution accounts two days later.

Xiaomi has mentioned in a prior media remark it believes its royalty bills “are all legit and truthful” and the bills had been made for “in-licensed technologies and IPs used in our Indian version products”.

Its court docket submitting said Xiaomi is “aggrieved for being targeted since some of its affiliate entities are based out of China”.

Check in now for FREE limitless get admission to to Reuters.com

Reporting by means of Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Modifying by means of Stephen Coates

Our Requirements: The Thomson Reuters Accept as true with Rules.

Leave a Comment

Your email address will not be published.