Indian authorities seized $725 million from the Chinese cell phone company on Saturday. Xiaomiafter accusing her of violating the country’s foreign exchange laws by illegally sending money abroad, officials said.
India’s financial investigations agency tweeted that it had seized the sum from the local unit of Xiaomi. The move comes after an investigation was launched in February over concerns about illegal shipments, according to local media.
The agency said the smartphone maker had transferred $725 million to “three foreign-based entities” disguised as royalty payments, according to a statement quoted by the Press Trust of India (PTI) news agency. This month, the agency interviewed the global vice president of XiaomiManu Kumar Jain, at the company’s regional office in the southern city of Bengaluru, PTI said.
The company asserts that it complied with local laws, adding that its “royalty payments and declarations” were “legitimate and true.” She added that she is committed to working closely with the Indian government to clear up any misunderstandings.
“Those royalty payments you made Xiaomi India were for licensed technologies and IPs used in our Indian versions of products. It is a legitimate business arrangement that Xiaomi India make those royalty payments,” the statement explained.
Two years ago, India banned more than 10 Chinese apps as tensions between the countries escalated over border clashes.
In June 2020, Chinese and Indian soldiers clashed with clubs, stones and fists on a disputed section of the border, claiming the lives of 20 Indian soldiers and four Chinese soldiers.