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Karnataka HC allows Xiaomi conditional access to seized ₹5,551 crores: Report
Xiaomi, ED: The agency slammed the Chinese manufacturer for 'baseless' and 'untrue' allegations - that its officers had threatened employees and their families with violence.
The Karnataka High Court has declined to reinstate a freeze on ₹5,551.27 crore belonging to Chinese smartphone giants Xiaomi, news agency Reuters said. The funds were seized by the Enforcement Directorate earlier this month in connection with 'illegal outward remittances' but the seizure was stayed after Xiaomi appealed. Xiaomi also accused the ED of recording statements 'under coercion' and filing charges - foreign exchange violations - as an 'afterthought'.
The high court on Thursday said its decision to stay the order (and allow Xiaomi access to the funds for non-royalty uses) would continue, Reuters reported.
"The matter requires further hearing," judge Siddappa Sunil Dutt Yadav said. The next hearing has been set for May 23.
The court was also told banks were not allowing Xiaomi access to the money even though it can for purposes other than paying royalties. The judge therefore allowed Xiaomi to use a bank overdraft facility.
READ: ED seizes ₹5,551 crore from Chinese smartphone giant Xiaomi
The latest round of courtroom battles between Xiaomi and the Enforcement Directorate comes after the central investigative agency slammed the Chinese mobile phone manufacturer for 'baseless' and 'untrue' allegations - that its officers had threatened employees and their families with violence.
In a statement issued Saturday the ED said it is 'a professional agency with…there was no coercion or threat to officers of the company at any point of time'.
"Allegations (that the) 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 said.
READ: 'Baseless…': ED on Xiaomi's claims employees faced threats of 'violence'
Xiaomi made the claims in a May 4 filing before the Karnataka high court.
READ: China's Xiaomi accuses ED of 'physical violence' threats - 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.
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.
The company, however, has firmly insisted it abides by all Indian laws and is 'fully compliant with all the regulations'.
READ: Xiaomi says all India ops 'compliant' with laws after ED seizure
"We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information".
Meanwhile, China's foreign ministry in Beijing has also reacted, and has asked its Delhi counterparts to ensure Chinese companies were not discriminated against while officials carry out investigations into compliance with laws.
With input from AFP, Reuters
