Indian court unblocks $725 million in Xiaomi assets in royalties lawsuit

Xiaomi logo inside the company’s office in Bengaluru, India, on January 18, 2018. REUTERS/Abhishek N. Chinnappa

NEW DELHI, May 6 (Reuters) – An Indian court has withheld a federal enforcement decision to confiscate $725 million from the local bank account of Chinese Xiaomi (1810.HK) on charges of violating foreign exchange laws. A source told Reuters. on friday.

The executive committee said last week that it had confiscated banking assets from Xiaomi Technology India Private Limited and found that the company had illicitly transferred funds to three foreign-based entities, including one Xiaomi group entity, under the guise of “royalty” payments. I did. read more

Xiaomi denied any wrongdoing, saying, “All statements made to the royalties payment and the bank are lawful and truthful.” It later challenged the Indian Financial Crimes Investigation Agency’s decision in the High Court of Southern Karnataka State.

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On Thursday, the judge, who heard Xiaomi’s lawyers, put a decision on hold by the executive, two sources said. The two sources declined to identify themselves as they were not authorized to speak to the press.

Xiaomi and the Executive Committee did not immediately respond to requests for comment. The written court order has not yet been released.

According to a source, Xiaomi was rescued on condition that it inform the Indian authorities of the transfer of funds, including royalties.

According to the Indian court’s website, the case is due to take place on 12 May.

According to Counterpoint Research, Xiaomi was India’s top smartphone seller in 2021 with a market share of 24%.

Earlier, Reuters reported that Xiaomi’s former India chief, Manu Kumar Jain, had been summoned and questioned as part of a board investigation. read more

Many Chinese companies are struggling to do business in India due to political tensions following the 2020 border clash. Citing security concerns, India has since banned more than 300 Chinese apps, including popular ones like TikTok, and tightened its norms for investing in Chinese companies. in India.

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Additional reporting by Abhirup Roy, edited by Lincoln Feast.

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