In July of this year, the Income Tax department, along with CEO Li Xiongwei, filed a case against top Huawei Telecommunications India officials, including CEO Li Xiongwei, and three others, alleging that the company has withheld important information on tax in some of the ongoing cases, as well as challenging an application by the Income Tax department in a Delhi court. The other two officers are CFO Sandeep Bhatia, tax head Amit Duggal and transfer pricing in-charge Long Cheng.
On May 1, Li was stopped from flying to Bangkok by the I-T department at New Delhi's Indira Gandhi International Airport. He was appointed CEO of the telecom giant in April 2020.
The case so far has been so far.
The I-T department accused Huawei of transferring a chunk of money to its parent firm in China as dividends, which is around $94 million, and trimmed its taxable income in India. In February of this year, a search operation was launched at several Huawei premises in India to look into the irregularities.
The LOC was issued by the I-T Department, which prevented Li from traveling outside India.
The circular was challenged by the CEO in the Delhi High Court, who demanded that he be allowed to travel abroad.
Following this, the I-T department urged the Court to dismiss Huawei CEO's application and ask him to appeal to a lower court for his reasons to travel abroad.
Other Chinese companies, such as Xiaomi, Vivo, and Oppo, are also under the scanner for their earnings and tax related issues.
The I-T department challenging Li's petition to travel abroad told the court that as India doesn't have an extradition treaty with China if the CEO of Huawei leaves the country, it would be very difficult for the authorities to bring him back for trial if he is found guilty. The lawyers appearing for the I-T department said it was possible that it was the case of flight risk.
The bench asked Li s counsel to produce information about Li's annual salary and arrange for two sureties, both Indian nationals, before it gives the verdict next week. The court asked for a detailed report on Li's relatives and the assets he owns in India.
The I-T department said that the LOC was issued on valid grounds and as per the law.