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

Chinese smartphone maker Xiaomi Corp has alleged its top executives faced threats of “physical violence” and coercion during questioning by India’s financial crime fighting agency, according to a court filing seen.

Officials from the Enforcement Directorate warned the company’s former India managing director, Manu Kumar Jain, current Chief Financial Officer Sameer B.S. Rao, and their families of “dire consequences” if they did not submit statements as desired by the agency, Xiaomi’s filing dated May 4.

The Enforcement Directorate did not immediately respond to a request for comment.

Xiaomi Corp has been under investigation since February and last week the Indian agency seized $725 million lying in the company’s India bank accounts, saying it made illegal remittances abroad “in the guise of royalty” payments. 

Xiaomi has denied any wrongdoing, saying its royalty payments were legitimate. On Thursday, a judge heard Xiaomi lawyers and put on hold the Indian agency’s decision to freeze bank assets.

The company alleges intimidation by India’s premier enforcement agency when executives appeared for questioning multiple times in April.

Jain and Rao were on certain occasions “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 agency, according to the filing in the High Court.

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.

Xiaomi declined to comment citing pending legal proceedings. Jain and Rao did not respond to Reuters queries.

Xiaomi was the leading smartphone seller in 2021 with a 24% market share in India, according to Counterpoint Research. It also deals in other tech gadgets including smart watches and televisions, and has 1,500 employees in the country.

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