Huawei India chief’s conduct showed he was a leak risk: IT department

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The Income Tax Department informed the Delhi High Court that a Watch Circular (LOC) had been issued against the Managing Director of Huawei Telecommunications (India) “because his conduct during the search showed that he constituted a flight risk”. The department alleged that the CEO’s conduct also demonstrated that “he was unwilling to cooperate with the ongoing investigative process.” In February this year, a search operation was carried out by income tax detectives at several Huawei-related premises in India.

In an affidavit filed in response to a motion filed by Huawei India CEO Li Xiongwei seeking the cancellation of the LOC issued against him, the IT department alleged that the CEO deliberately attempted “to deny access to the books accounts, emails or key people in the company”.

The affidavit, seen by ET, said the CEO “systematically denied and delayed ongoing (research) proceedings, even to the point of not providing access to the emails of the company’s chief financial officer who remains outside India”.

He said “the rights of an individual must be balanced with safeguarding the interests of prosecution and investigative bodies”. The department said the LOC was issued after reviewing the actions of the CEO, which “led to a substantial belief that he wished to evade the investigation” against Huawei Telecommunications (India). The department argued that “the right to travel is not an absolute right and reasonable restrictions may be imposed”.

He urged the court to reject the CEO’s plea and ask him to go to a lower court and explain the circumstances compelling him to travel abroad. He maintained that the LOC issued against the CEO is “correct and in accordance with the provisions of the law”. Huawei denied the accusations of non-cooperation. In a statement released to ET on Wednesday, Huawei’s India unit said it fully cooperates with authorities and has submitted information and clarifications required by authorities from time to time.

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