Xiaomi Corp's top executives were allegedly threatened with "physical assault" and coercion, during questioning by the Enforcement Directorate. According to Xiaomi's filing dated May 4, officials from the Enforcement Directorate warned Manu Kumar Jain, the company's former India managing director, and Sameer B.S. Rao, the company's current Chief Financial Officer, is of "dire consequences" if they did not submit statements as requested by the agency.

Xiaomi has been under investigation since February, and ED confiscated $725 million from Xiaomi's India bank accounts last week, alleging that the business made unlawful transactions abroad "under the pretence of royalty" payments.

Xiaomi, Manu Kumar Jain, Global, Vice president, Managing Director, Manu Jain Xiaomi,
[Representational Image] Manu Kumar Jain VP XiaomiXiaomi India via Facebook (screen-shot)

Xiaomi has denied any wrongdoing and claims that its royalty payments are legal. A judge heard Xiaomi attorneys on Thursday and put the Indian agency's order to freeze bank assets on hold. The next hearing will take place on May 12. When officials came for interrogation many times in April, the corporation claims they were intimidated by India's top law enforcement agency.

As per a report by news agency Reuters, 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, as per the filing in the High Court of Karnataka. 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 also claimed.

Enforcement Directorate
Enforcement DirectorateIANS

ED denies allegations

However, the ED has denied the allegations levelled by Xiaomi. In a press note, the agency called the allegations ''untrue and baseless." It read, " The allegations that the statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless. The officials of the Xiaomi India deposed their statements before ED under FEMA voluntarily in the most conducive environment on various occasions."