Xiaomi’s fight against New Delhi’s decision to freeze its funds is set to continue, amid ongoing geopolitical tensions
- Xiaomi had around US$670 million of funds frozen in India last year amid investigation into overseas payments
- India’s financial crime agency has accused Xiaomi of making illegal remittances to foreign entities and passing them off as royalties
Chinese smartphone maker Xiaomi is set to continue its legal fight in India over New Delhi’s decision to freeze around US$670 million of funds, according to a person familiar with the situation, extending a battle that has become a cautionary tale for Chinese businesses that enter the country.
In the latest development, India’s Enforcement Directorate has issued notices to Xiaomi and its bankers, including Deutsche Bank, HSBC and Citigroup, over alleged illegal remittances made by Xiaomi, according to a Reuters report last week.
India’s financial crime agency alleges Xiaomi’s local unit made illegal remittances to foreign entities by passing them off as royalty payments, with banks allegedly handling these remittances without obtaining the necessary documentation, according to the Reuters report.
When reached by the Post on Wednesday, Xiaomi pointed to a statement issued by Xiaomi India on Twitter last October, which said it will continue to use all means to protect its reputation and the interests of shareholders while remaining committed to working with various authorities to resolve the issue.
A person familiar with the situation at Beijing-based Xiaomi, who declined to be named as they are not authorised to talk to media, said no notice has been received and they will continue their fight to unfreeze India accounts.