India has seized assets worth approximately $725 million from Xiaomi India after the country’s anti-money laundering agency found the subsidiary had broken local foreign exchange laws. According to Reuters, India’s Enforcement Directorate announced Saturday it recently determined Xiaomi had made illegal remittances when it attempted to pass off some transfers as royalty payments.
That money went to three foreign companies, including one under the wider Xiaomi banner. The Enforcement Directorate found Xiaomi designed the payments to benefit itself. "Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities," the agency said. The Indian Enforcement Directorate began investigating the subsidiary, among a handful of other local Chinese firms, last December. It accused Xiaomi of providing “misleading information to the banks while remitting the money abroad.”
— Xiaomi India (@XiaomiIndia) April 30, 2022
On Twitter, Xiaomi said it believes its payments were legitimate. "These royalty payments that Xiaomi India made were for the in-licensed technologies and IPs used in our Indian version products,” the company stated. “We are committed to working closely with government authorities to clarify any misunderstandings." We’ve reached out to the company for additional information and comment.
As of last year, Xiaomi was India’s leading smartphone manufacturer, with a dominant 24 percent share of the market. But like many Chinese firms in India, it has recently been forced to navigate a regulatory regime that has become less welcoming of Chinese business interests. In 2021, India temporarily banned TikTok following the country’s border dispute with China and later reportedly withheld WiFi device approvals to encourage domestic production.
from Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics https://ift.tt/ToxA5wc
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