Xiaomi’s allegations of coercion are unfounded, says the Enforcement Directorate

The Enforcement Directorate on Saturday dismissed as “unfounded” claims that statements by officials at Xiaomi India, the wholly-owned subsidiary of Chinese mobile phone maker Xiaomi, were recorded “under duress” and said the charges were an afterthought.

The federal agency was responding to certain news reports that Xiaomi alleged in a recent complaint filed in the Karnataka High Court that its top executives were threatened with “physical violence and coercion” during their questioning by ED investigators in Bengaluru.

The Enforcement Directorate (ED) issued a statement saying it was “a professional agency with a strong work ethic and at no point was there any coercion or threat to the company’s officers.”

“The allegation that the testimony of Xiaomi India officials was taken under duress by ED is untrue and unfounded.” “Xiaomi India officials have voluntarily made their statements before ED under FEMA on various occasions in the most conducive environment,” said the agency.

The statements were made by them on the basis of documents and information provided by the company in the course of the investigation.

“Their statements are consistent with written responses submitted to ED and recorded material,” the agency said.

The development comes amid ED on April 29th issuing an order ordering over Rs. 5,551 crore worth of Xiaomi India funds over alleged violations of India’s Foreign Exchange Management Act.

The Karnataka High Court stayed that ED order earlier this week.

The agency added that Xiaomi Global Vice President Manu Kumar Jain’s statement was recorded four times, on April 13, April 14, April 21 and April 26, while that of Chief Financial Officer (CFO) Sameer BS Rao has been recorded six times.

Rao’s testimony was recorded on March 25, April 14, April 19, April 21, April 22 and April 26, it said.

“However, at no point during the taking of statements on various occasions was a complaint lodged by them.” It appears that the claim, now made after a considerable period of time, is an afterthought,” it said.

The agency said Xiaomi’s allegations were “baseless and far from the facts”. Xiaomi is a retailer and distributor of mobile phones in the country under the MI brand name. Xiaomi’s allegations of coercion are unfounded, says the Enforcement Directorate

Ryan Sederquist

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