India accuses Chinese phone maker Xiaomi of forex violations | Business and Economy News

India’s anti-money laundering agency has taken control of Xiaomi Technology India’s bank accounts, he said.

India accused Xiaomi Corp. of violating the country’s foreign exchange laws and seized 55.51 billion rupees ($726 million) from a local unit of the smartphone maker, in the latest clash between India and a Chinese company over their activities in the market.

India’s anti-money laundering agency has taken control of Xiaomi Technology India’s bank accounts under the provisions of the Foreign Exchange Management Act, it said in a statement. The company’s local unit handed over money to three overseas-based entities with ties to Xiaomi, falsely claiming they were royalty payments, the Enforcement Branch said. the law.

“Xiaomi India sources the fully-manufactured mobile sets and other products from manufacturers in India,” the agency said in its statement. “The company also provided misleading information to banks when transferring the money overseas.”

India has taken a hard line against Chinese companies operating in the country since troops from the two countries clashed in 2020. India has blacklisted more than 200 mobile apps from Chinese vendors, including services of purchase of Alibaba Group Holding Ltd., the short video of TikTok of ByteDance Ltd. and applications used on Xiaomi phones.

Last month, Chinese Foreign Minister Wang Yi visited his counterpart, Subrahmanyam Jaishankar, for the first time since border tensions erupted in a bid to restore relations. “I would describe our current situation as a work in progress,” Jaishankar said at the time.

ED seized Rs.5551.27 Crore from M/s Xiaomi Technology India Private Limited which was in the bank accounts under the provisions of the Foreign Exchange Management Act 1999 in relation to illegal funds transfers made by the company.

— ED (@dir_ed) April 30, 2022

Xiaomi has challenged the seizure of India’s assets, arguing that its royalty payments are justified and its statements to financial institutions are accurate. Xiaomi has been one of the most successful smartphone brands in the fast-growing market, becoming the largest in terms of shipping volumes in the country.

“All of our operations strictly comply with local laws and regulations,” Xiaomi India said in his Twitter post. “These royalty payments that Xiaomi India made were for licensed technologies and IP addresses used in our Indian version products. It is a legitimate business agreement for Xiaomi India to make such royalty payments.

The company did not say what steps it would take next or whether it would take legal action to recover its assets.

“We are committed to working closely with government authorities to clarify any misunderstandings,” he said.

pic.twitter.com/QPfHboEP8X

— Xiaomi India (@XiaomiIndia) April 30, 2022

About Charles D. Goolsby

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