Home News India has confiscated $ 725 million from Xiaomi’s bank accounts

India has confiscated $ 725 million from Xiaomi’s bank accounts

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The financial crime agency has investigated the Chinese company’s business practices regarding alleged violations of Indian foreign exchange laws.

The institution said on Saturday that it had confiscated the assets from Xiaomi Technology India Private Limited’s bank account after finding that the company had remitted the currency equivalent of 55.5 billion rupees to three foreign entities, including one Xiaomi group entity. ”Under the pretext of royalty payments.

The referral to two other unidentified and unaffiliated entities based in the United States was also for the “ultimate benefit of the entities in the Xiaomi group,” the agency said in a statement.

“Such huge sums in the name of royalties have been remitted to the instructions of their entities in the parent group in China,” the agency said.

Xiaomi said in a statement that it complied with Indian law and believed that “the copyright payments and its statements to the bank are all legitimate and truthful.”

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“These royalty payments that Xiaomi India has made have been for licensed technologies and IPs used in our Indian version products … we are committed to working closely with government authorities to clarify any misunderstandings,” he added. this.

The agency’s actions against Xiaomi signal the expansion of control over the Chinese smartphone maker, whose Indian headquarters was searched in December in a separate investigation into alleged tax evasion.

Other Chinese smartphone makers were also searched at the time.

Reuters reported on April 12 that Xiaomi’s former head of India, Manu Kumar Jain, had been summoned for questioning.

Jain, who is now Dubai-based global vice president of Xiaomi, appeared before investigators earlier this month, a source with direct knowledge of the investigation said, asking not to be named because of the sensitivity of the issue.

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The agency also asked the company for details on external financing, shareholders and financing models, financial statements and information on key executives running the business.

Xiaomi has been India’s largest smartphone maker in 2021, with a 24% market share, according to Counterpoint Research.

Samsung, from South Korea, was the brand no. 2, with a share of 19%.

Many Chinese companies have struggled to do business in India due to political tensions following a 2020 border clash.

India has raised security concerns in banning more than 300 Chinese applications since then, including popular ones such as TikTok, and has tightened rules for Chinese companies investing in India.

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