Sign up now for FREE unlimited access to Reuters.com Register NEW DELHI, April 30 (Reuters) – India said on Saturday it had seized $ 725 million from the local bank accounts of China’s Xiaomi Corp (1810.HK) after an investigation found that the smartphone maker had made illegal remittances to foreign entities. as royalty payments. The Enforcement Directorate had investigated the Chinese company’s business practices regarding suspected violations of Indian foreign exchange legislation. read more The Financial Crimes Agency announced on Saturday that it had seized the bank account assets of Xiaomi Technology India Private Limited after finding that the company had sent the equivalent of Rs 55.5 billion in foreign currency to three foreign-based entities. an entity of the Xiaomi group. the pretext of rights »payments. Sign up now for FREE unlimited access to Reuters.com Register The transfer to two other unknown and unrelated entities based in the US was also to the “absolute benefit of the Xiaomi group entities”, the service added. “Such huge sums in the name of royalties were paid on behalf of the Chinese entities of their parent group,” the management said in a statement. Xiaomi did not immediately respond to a request for comment. The company had previously told Reuters that it was “cooperating with the authorities in their ongoing investigation to ensure that they have all the necessary information”. The management’s actions signal an expanded control of the Chinese smartphone maker, whose office in India was raided in December in a separate investigation into alleged income tax evasion. Other Chinese smartphones were also raided at the time. Reuters reported on April 12 that Xiaomi’s former head of India, Manu Kumar Jain, had been summoned for questioning as part of a management investigation. read more Jain, who is now Dubai’s global vice president of Xiaomi, appeared before investigators earlier this month, a source with immediate knowledge of the investigation said, asking not to be named because of the sensitivity of the issue. The Enforcement Department also requested details from the company regarding foreign financing, equity and financing, financial statements and information of key executives who run the business. Xiaomi was the top smartphone seller in India in 2021, with a market share of 24%, according to Counterpoint Research. South Korea’s Samsung was the No. 2 brand with a 19% stake. Many Chinese companies have struggled to operate in India due to political tensions following a border conflict in 2020. India has cited security concerns by banning more than 300 Chinese applications since then, including popular ones like TikTok, as well as stricter rules. companies investing in India. Sign up now for FREE unlimited access to Reuters.com Register Report by Aditya Kalra in New Delhi. Editing by William Mallard, Helen Popper and Mike Harrison Our role models: The Thomson Reuters Trust Principles.
