Xiaomi's Manu Jain reportedly skips ED questioning today, seeks more time to join probe
India Today
ED is currently investigating the matter and analyzing if the company has violated FEMA as suspected by the Income Tax Department.
The Enforcement Directorate (ED), on Tuesday, summoned Xiaomi Corporation’s Manu Jain for an ongoing probe related to an alleged violation of foreign exchange laws. Jain was to appear before the ED for interrogation today but requested more time to join the investigation, a report from ANI stated.
As per the publication, Jain, now reportedly the former India head of Xiaomi, has expressed his unavailability to appear before ED today and sought more time to join the investigation. Considering Jain’s unavailability, ED will need to issue fresh summons to join the investigation. We reached out to Xiaomi for a statement and will update the story when they issue one.
The report stated that ED is currently investigating the matter and analyzing if the company has violated FEMA as suspected by the Income Tax Department. Sources at ED have reportedly revealed that Xiaomi has made remittances, which aggregate to more than a thousand crore rupees, in the nature of royalty, to and on behalf of its group companies located abroad.
“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," the report stated.
ED sources have also revealed that “foreign funds have been introduced in the books of the Indian company but it transpires that the source from which such funds have been received are of doubtful nature, purportedly with no creditworthiness of the lender. The quantum of such borrowings is in crores of rupees on which interest expenses have also been claimed".
The report stated that “evidence with regard to the inflation of expenses, and payments on behalf of the associated enterprises have also been noticed which led to the reduction of taxable profits of the Indian mobile handset manufacturing company”.
Xiaomi said that it is fully cooperating with ED and is a law-abiding and responsible company. "We give paramount importance to the laws of the land. We are fully compliant with all the regulations and are confident of the same. We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information," the company spokesperson said in an official statement.
