ByteDance : India's freezing of bank accounts poses a threat

ByteDance: India's freezing of bank accounts poses a threat

ByteDance, a Chinese company, has informed an Indian court that the government's freezing of bank accounts was a threat and was being done illegally, according to a file seen by Reuters.

ByteDance cut its Indian workforce in January after New Delhi kept a ban on the popular video app TikTok, which was imposed last year after a border clash between India and China.

Beijing has repeatedly criticized India for banning TikTok and other Chinese apps.

In mid-March, an Indian tax intelligence unit, HSBC and Citibank, in Mumbai, ordered to freeze ByteDance India's bank accounts while investigating some of the unit's financial transactions.

ByteDance has appealed against the four accounts freeze in a Mumbai court.

None of ByteDance India's employees got paid for the month of March due to the account freeze, and the company told the court it has a workforce of 1,335 people, including outside employees.

ByteDance informed the Mumbai High Court that the authorities acted against the company without any physical evidence and did not provide preliminary notice prior to the action as required by Indian law.

In the 209-page court file filed on March 25, ByteDance argued that blocking accounts during the investigation process amounted to undue coercion.

And ByteDance's tax agency made it clear last year that it had reason to believe it had demanded excessive tax breaks.

The court refused to grant ByteDance an immediate relief at the short hearing.

The investigation focuses on potential tax evasion related to online advertising and other financial transactions between ByteDance India and the Singapore parent entity, TikTok.

ByteDance told the court: Its workforce in India includes 800 people who work for the Trust and Security team that supports activities such as overseas content moderation.

She added that it has strong business plans in India and is not considering liquidating it, and urged the court to lift the account freeze.

The Tax Authority began investigating the company in July, examining documents in the company’s office and summoning and questioning at least three executives.

Authorities also required ByteDance to provide documents, including invoices and signed agreements with some clients, and ByteDance representatives appeared several times in front of tax officers and presented the documents.

And TikTok, one of India's most popular video apps before it was banned, is under scrutiny around the world.

Under former President Donald Trump, the United States has claimed that the app raises national security concerns.

The new administration of President (Joe Biden) has halted a government lawsuit that could have resulted in an effective ban on TikTok use in the United States.