Indian authorities have blocked ByteDance’s bank accounts in South Africa over alleged tax evasion and the company has asked the court to rescind the order, fearing it would seriously affect its operations, two sources told Reuters.
ByteDance in January reduced its Indian staff after New Delhi decided to keep the ban on its popular video program TikTok, which was first banned last year following a border dispute between India and China. China has repeatedly criticized India’s move, saying it suspects it is against WTO rules.
ByteDance still has about 1,300 employees in India, most of whom work on its overseas operations, including work on content such as content measurement.
NEW: Responding to the development, ByteDance said it would increase its full cooperation with the government. â€œAt ByteDance, we are committed to complying with local laws and regulations. While we do not agree with the tax authorities’ decision on this matter, we will increase our full cooperation with government, â€a Bytedance spokesman said in a statement to HT Tech.
In mid-March, two ByteDance India bank accounts at Citibank and HSBC were ordered to be blocked by authorities over allegations of tax evasion in online trading between India’s ByteDance division and its Singapore parent organization, TikTok Pte Ltd, two sources it said.
Apart from both accounts, authorities also instructed Citibank and HSBC not to allow ByteDance India to withdraw money from any other bank accounts linked to its ID number, the original source said.
In a court hearing soon to be held in the Supreme Court of the financial capital Mumbai – ByteDance India argued that although it had only $ 10 million in its accounts, the restraining order was to violate the legal process and make it difficult to pay salaries and taxes, the source added.
Both sources declined to be named as details of the bank’s ice bank or company court case were not public.
ByteDance India, along with HSBC, Citibank and the Indian Treasury, did not immediately respond to a request for comment.
The ban on the TikTok app – which is part of many Chinese applications that were banned last year – in what India said was a goal of national security and sovereignty. The move has been widely seen as an Indian withdrawal by Chinese businesses after a dispute in the Himalayan border that left 20 Indian soldiers dead.
The order to suspend ByteDance India’s bank accounts came after tax authorities last year inspected documents in the company’s office, scrutinized documents and questioned certain executives about advertising and other activities with its parent company, the original source said.
In a court order, the source, ByteDance India, argued that the entire business had been liquidated because the bank was a scam and that such an act violated its “free trade and trade rights”.
“The company already has a problem with the Indian ban. This could hit workers’ salaries, paying retailers,” a second source said.
TikTok has been looked down upon around the world. During the administration of U.S. President Donald Trump, who said the app raises national security concerns as U.S. personal information could be obtained by the Chinese government, allegations the company has denied.
The new administration of US President Joe Biden has suspended a court case that could lead to a ban on the use of TikTok in the United States.