Delhi HC permits Huawei CEO to travel abroad

Upholding a Trial Court order by which look out circular (LOC) issued against Xiongwei Li, CEO of Huawei Telecommunications (India) Company Private Limited was quashed, the Delhi High Court on Tuesday permitted him to travel abroad subject to depositing of an FDR of Rs. 5 crores.

Justice Anu Malhotra added that the condition so imposed will be forfeited on account of Xiongwei Li’s non-joining of the investigation and non-appearance as and when directed by the Trial Court.

The Court thus dismissed the petition filed by Deputy Director of Income Tax challenging an order passed by the Trial Court dated August 29, 2022 which had quashed the LOC, issued at the request of Income Tax Officer, against Xiongwei Li. The plea also sought stay of the operation of the impugned order.

While upholding the impugned order and modifying it with additional directions, the High Court clarified that its conditions pertaining to deposit of FDR have been imposed taking into account the eventuality of the alleged commission of an offence punishable under Section 276C(1)(i) of the of the Income Tax Act, 1969 read with Section 278B(1) of the Income Tax Act, 1969, if any, committed by Xiongwei Li.

The Trial Court had quashed the LOC with conditions that in case of resignation, retirement or cessation of Xiongwei Li’s employment from Huawei Telecommunications (India) Company Private Limited, the company will withhold his Severance Pay and other incentives.

The Trial Court also said that such pay cannot be released without its prior permission and that an undertaking to this effect will have to be submitted by Xiongwei Li from the company which has to be filed with the Court under intimation to the Deputy Director of Income Tax.

The High Court was informed that Xiongwei Li had submitted the said undertaking before the Trial Court, which had directed that LOC be withdrawn or recalled within 7 days of filing of the same.

Noting that there was no extradition treaty between India and China, the High Court said that while Xiongwei Li fell within the category of a flight risk, however, the fact that he was alleged to have committed only a non-cognizable and bailable offence cannot be overlooked. Live Law