India Reportedly Seized Xiaomi Rp 10 T Assets, What’s Up?

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India reportedly seized Xiaomi Corp assets worth US$725 million or the equivalent of Rs.10.5 trillion (Rs.14,490) in local bank accounts. According to the results of the investigation, it was found that Xiaomi made illegal remittances to foreign companies by passing them on as royalties.

India’s financial crimes watchdog, the Directorate of Enforcement, has investigated the Chinese company’s business practices for alleged violations of India’s foreign exchange laws.

The agency said it seized the bank account assets of Xiaomi Technology India Private Limited after discovering the company had paid the equivalent of Rs.55.5 billion (Rp10.44 trillion (Rp189.81) in foreign currency) to three overseas companies , including Xiaomi Group companies, “under the guise of royalties”.

“This enormous amount on behalf of these royalties was remitted on the instructions of their Chinese parent company,” the directorate said in a statement, citing ReutersSaturday (4/30/2022).

Xiaomi did not immediately respond to this incident but predicted it Reuters that it will work with authorities during ongoing investigations to ensure they have all the information they need.

The directorate’s actions signal a broader scrutiny of the Chinese smartphone maker. Xiaomi’s office in India was raided last December in a separate investigation into alleged tax evasion.

Several other Chinese smartphone brands were also searched at the time.

Reuters reported on April 12 that Xiaomi’s former head of India, Manu Kumar Jain, has been summoned for questioning as part of the directorate’s investigation.

Jain, who is now global vice president at Xiaomi based in Dubai, appeared before investigators earlier this month, a source with direct knowledge of the investigation said.

As part of the investigation, the Enforcement Directorate also requested the company to provide detailed foreign financing reports, holdings and financing patterns, financial statements and information from executives who run Xiaomi’s business.

(hns/hns)

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