Indian court lifts $725 million blockade of Xiaomi assets in royalty case – sources

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

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NEW DELHI, May 6 (Reuters) – An Indian court has suspended a federal agency’s decision to seize $725 million from local bank accounts of China’s Xiaomi Corp (1810.HK) on suspected violations of foreign exchange laws, two sources said. to Reuters on Friday.

The Enforcement Board last week seized the banking assets of Xiaomi Technology India Private Limited, saying it found that the company illegally remitted funds to three foreign entities, including a Xiaomi group entity, “under the guise of royalties”. see More information

Xiaomi has denied any wrongdoing, saying its “royalty payments and statements to the bank are all legitimate and true”. He later filed a challenge against the decision of the Indian financial crime-fighting agency in the Supreme Court of the southern state of Karnataka.

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On Thursday, after hearing from Xiaomi’s lawyers, a judge suspended the Enforcement Board’s decision, said the two sources, who declined to be identified as they were not authorized to speak to the media.

Xiaomi and the Executive Board did not immediately respond to requests for comment. The written court order is not yet public.

The relief was granted on the condition that Xiaomi inform Indian authorities about transfers of funds such as royalty payments, one of the sources said.

The case will be heard on May 12, according to the Indian court’s website.

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

Reuters previously reported that former Xiaomi India boss Manu Kumar Jain was summoned and questioned as part of the board’s investigation. see More information

Many Chinese companies have struggled to do business in India due to political tensions following a 2020 border clash. India has cited security concerns by banning more than 300 Chinese apps since then, including popular apps like TikTok, and has also tightened regulations. for Chinese companies investing in India.

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Additional reporting by Abhirup Roy; Edited by Lincoln Feast.

Our Standards: The Thomson Reuters Trust Principles.

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