Li Xiongwei, the CEO of Huawei Telecommunications India, claimed that he is a “Chinese national and not a terrorist” in a court filing in Delhi disputing an application made by the Income Tax department.
According to a report in The Economic Times, the Income Tax department filed a case in July of this year against three other high-ranking Huawei Telecommunications (India) executives, including CEO Li Xiongwei, alleging that the company is withholding crucial tax-related information in some of the ongoing cases. Sandeep Bhatia, the deputy CFO, Amit Duggal, the tax chief, and Long Cheng, the person in charge of transfer pricing are the other officers implicated.
Li’s flight to Bangkok was halted by the I-T division on May 1 at the Indira Gandhi International Airport in New Delhi. In April 2020, he was chosen to lead the multinational telecom company.
The situation thus far
The I-T department had already charged Huawei with reducing its taxable income in India by sending a sum of money—approximately $94 million—as dividends to its parent company in China. In order to investigate the discrepancies, a search operation was started in February of this year at multiple Huawei locations in India.
The I-T Department issued a lookout circular (LOC) preventing Li from leaving India while the investigations are ongoing.
The CEO contested the circular in the Delhi High Court and sought that he be given permission to travel internationally.
The I-T department then urged the Court to deny the motion of the Huawei CEO and instructed him to appeal to a lower court while providing an explanation of his need to travel abroad.
Other Chinese businesses like Xiaomi, Vivo, and Oppo are also being investigated for difficulties with their earnings and taxes.
A ‘Flight Risk’ situation
According to the I-T department, who is opposing Li’s request to travel abroad, it would be “extremely difficult” for the government to extradite the Huawei CEO back to face charges if he leaves the country because India and China don’t have an extradition treaty.
Li’s behaviour had been cited by the department a few times as evidence that “he did not intend to assist in the investigation and was evading it.” Li’s attorney Vijay Aggarwal responded to the accusations by saying in court: “I am a Chinese national and not a terrorist.”
Li’s attorney argued the case and claimed that the department had abused its authority by “opposing bail in a bailable offence.” Since the department’s notification can only be issued in the event of a cognisable offence, the entire act was “disturbing.”
Prior to rendering its decision next week, the bench requested that Li’s attorney present details regarding Li’s yearly pay as well as make arrangements for two sureties, both of whom were citizens of India.
The court has also requested a thorough report on Li’s family members and his Indian assets.
On its part, the I-T department claimed that the LOC was given legally and on legitimate grounds.