China on Monday expressed hope that India will provide a “fair, just and non-discriminatory environment” for its businesses as it reacted cautiously to reports that senior executives at Chinese smartphone maker Xiaomi had made the under investigation by the Enforcement Directorate regarding its remittances abroad.
China is closely monitoring the situation, Chinese Foreign Ministry spokesperson Zhao Lijian said at a press conference, responding to a question about allegations of physical violence and coercion by top Xiaomi executives. by the Enforcement Directorate (ED) in its investigations of its remittances.
“We hope India will provide a fair, just and non-discriminatory business environment for Chinese companies, investigate and enforce in accordance with laws and regulations to enhance global investor confidence,” Zhao said.
He said the Chinese government always asks its companies to abide by laws and regulations when doing business overseas.
But at the same time, he firmly supports Chinese companies in defending their legitimate rights and interests, he said.
Xiaomi is accused of making illegal remittances abroad “under cover of royalties”.
The ED on Saturday dismissed as “baseless” allegations that statements by officials of Xiaomi India, the wholly-owned subsidiary of Chinese cellphone maker Xiaomi, were recorded “under duress”, saying that the charges were just an afterthought.
The federal agency was responding to some reports that Xiaomi alleged in a recent Karnataka High Court filing that its top executives were threatened with “physical violence and coercion” during their interrogation by ED investigators in Bengaluru.
The ED released a statement saying it was “a professional agency with a strong work ethic and there was no coercion or threat against company executives at any time.” .
“Allegations that the statement by Xiaomi India officials was taken under duress by ED are false and baseless,” ED’s statement said.
The development comes amid the ED passing an order on April 29 to seize funds from Xiaomi India worth more than Rs 5,551 crore over alleged violation of India’s Foreign Exchange Management Act ).
Earlier this week, the Karnataka High Court suspended this ED order.
Xiaomi is a mobile phone trader and distributor in India under the MI brand.
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