Xiaomi Global Vice President Manu Kumar Jain was unable to respond to the summon by the Enforcement Directorate (ED). Jain, who was Xiaomi India head, asked the ED for more time to join the investigation on the company’s operations.
A report by ANI quoted sources who claimed that Jain expressed his unavailability to appear before the ED for the investigation and asked for more time. The report suggests that the ED will issue fresh summons to Jain for joining the investigation.
After the report surfaced about ED’s summon, Xiaomi’s spokesperson said that the company abides by all the Indian laws and was also “fully compliant with all the regulations.”
Manu Kumar Jain has been summoned for a case related to a violation of the provisions of the Foreign Exchange Management Act (FEMA). ED is investigating this case referred by Income Tax Department.
The report claimed that ED is investigating the case of whether the company has violated FEMA, as suspected by the Income Tax Department. Some ED sources claimed that Xiaomi has made remittances in the nature of royalty, to and on behalf of its group companies located abroad, which aggregates to more than a thousand crore rupees.
The remittances may not be appropriate according to the findings of ED. During the investigation, ED gathered that Xiaomi had not complied with the regulatory mandate for disclosure of transactions with associated enterprises. Such lapse makes them liable for action.
Income Tax Dept Searches in December
Xiaomi, Oppo, OnePlus and some other Chinese companies were subject to searches by the Income Tax Department in the month of December. The searches were conducted on various premises related to these companies spread across different parts of the country including, Karnataka, Tamil Nadu, Assam, West Bengal, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan and Delhi NCR.
In December 2018, the Income Tax department launched searches on various premises related to Xiaomi and other Chinese companies such as Oppo, OnePlus, etc. The searches were conducted on various premises related to these companies spread across different parts of the country including Karnataka, Tamil Nadu, Assam, West Bengal,