India’s anti-money laundering agency said on Saturday it has seized assets worth about $725 million from Xiaomi India for breaching the country’s foreign exchange laws in a major blow to the Chinese phone maker that commands the Indian smartphone market.
The Indian Enforcement Directorate said it had seized bank accounts of Xiaomi India after finding that the company had remitted $725 million to three foreign-based entities “in the guise of royalty” payments.
“Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities,” it said. The amount remitted to “other two US-based unrelated entities” were also for the “ultimate benefit of the Xiaomi group entities,” the agency added.
The directorate, which has been investigating Xiaomi for several months, said the Chinese firm has “provided misleading information to the banks while remitting the money abroad.”
Xiaomi, which has yet to comment, commanded 23% of India’s smartphone market share in the quarter that ended in March this year, according to market research firm Counterpoint.
The company has taken a hit in its popularity in recent years following India’s ban on Chinese apps over national security concerns. For optics measures, Xiaomi rebranded several of its shops in India last year with “Made in India” banners two years ago to distance its Chinese brand.
Source: Read More