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Will protect business interests after asset freeze in India: Xiaomi

MUMBAI (Reuters) – Chinese smartphone maker Xiaomi Corp said on Sunday it was “disappointed” with an Indian order that froze $682 million of its assets and would continue to protect its interests.

An Indian appellate authority on Friday upheld an April order from India’s federal anti-financial crime agency, the Enforcement Directorate, to seize Rs 55.51 billion, saying an investigation found Xiaomi had made illegal remittances to foreign entities masquerading as royalty payments.

The Chinese smart device firm said in a statement on Sunday that more than 84% of the 55.51 billion Indian rupees seized by the Enforcement Directorate earlier this year was royalty payments made to US chipset company Qualcomm Group.

“We will continue to use all means to protect the reputation and interests of the company and our shareholders,” he said.

The company said that Xiaomi India is an affiliate and one of the Xiaomi Group companies, which entered into a legal agreement with Qualcomm to license intellectual property for smartphone manufacturing.

Both Xiaomi and Qualcomm believe that it is a legitimate business arrangement for Xiaomi India to pay Qualcomm royalties, according to the statement.

With an 18% share each, Xiaomi and Samsung together lead the smartphone market in India, the second largest in the world after China, according to data from Counterpoint Research.

Many Chinese companies have had trouble doing business in India due to political tensions following a border standoff in 2020.

India cited security concerns in banning more than 300 Chinese apps since then, including popular ones like TikTok, and also tightened rules for Chinese companies investing in India.

(Reporting by Rupam Jain; Editing by Sandra Maler)

(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated source.)

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