Guests gather to check out Xiaomi's newly launched products
at an event in Bangalore, India, Tuesday, Sept. 17, 2019. Indian authorities on
Saturday, April 30, 2022, seized $725 million from Chinese smartphone company
Xiaomi after an investigation found it had broken the country's foreign
exchange laws by making illegal remittances abroad, officials said. (AP
Photo/Aijaz Rahi, File)
NEW DELHI (AP) — Indian authorities on Saturday seized $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 $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 Bengaluru,
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.
Two years ago, India banned over 100 Chinese-owned apps as
tensions between the countries soared over border clashes. In June 2020, Indian
and Chinese troops fought with clubs, stones and fists along a disputed section
of their border, leaving 20 Indian and four Chinese soldiers dead.
Since February last year, both countries have withdrawn
troops from some sites, but they still maintain a presence. In March, Chinese
Foreign Minister Wang Yi traveled to New Delhi to discuss expediting
the disengagement of troops and the possibility of de-escalating the situation.
https://apnews.com/article/business-india-new-delhi-437e5c4125bdfea1c8e240804fc0dbc8
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