India seizes US$725 million from China’s Xiaomi over remittances
- The move comes after an investigation was launched by the federal agency in February over concerns of illegal remittances, local media reported
- India’s financial investigation agency said Xiaomi had transferred US$725 million to ‘three foreign-based entities’ under the guise of royalty payments
Indian authorities on Saturday seized US$725 million from Chinese smartphone company Xiaomi, accusing it of breaking the country’s foreign exchange laws by making illegal remittances abroad, officials said.
The Enforcement Directorate, India’s financial investigation agency, tweeted that it had seized the amount from Xiaomi’s local unit. The move comes after an investigation was launched by the federal agency in February over concerns of illegal remittances, local media reported.
The agency said the smartphone maker had transferred US$725 million to “three foreign-based entities” under the guise of royalty payments, according to a statement quoted by the Press Trust of India. Earlier this month, the agency had also questioned Xiaomi’s global vice-president, Manu Kumar Jain, at the company’s regional office in the southern city of Bangalore, PTI reported.
The smartphone company said it complied with local laws and added that its “royalty payments and statements” were “legit and truthful”. It said it is committed to working closely with the government to clarify any misunderstandings.
“These royalty payments that Xiaomi India made were for in-licensed technologies and IPs used in our Indian version products. It is a legitimate commercial arrangement for Xiaomi India to make such royalty payments,” the statement said.