India seizes 688 million euros from Xiaomi over illegal royalty payments – Tablets, phones – News

Indian authorities confiscated about 688 million euros in funds from Xiaomi India. according to Implementation Directorate In the state, the company made illegal payments to foreign entities.

Xiaomi would classify these payments as royalties. Enforcement Directorate, a kind of Indian equivalent of the Financial Markets Authority, calls The amounts are “huge” and Xiaomi accuses that it’s not about royalties at all. “Xiaomi India acquired its mobile phones and other products from manufacturers in India. Xiaomi India did not purchase any services from the three foreign entities to which it paid royalties,” the department said in a statement on Saturday.

Xiaomi India is said to have made these payments to three foreign entities as directed by the parent company in China. One of them will be part of the Xiaomi range. The other two are located in the US and have nothing to do with Xiaomi, but the payments nonetheless will “ultimately benefit Xiaomi members”[bedrijven]Collection’. The payments have been made since 2015 and are in violation of a law Foreign Exchange Management Lawsection 4, ED continues.

Xiaomi mentions in interaction On Twitter, the payments are “legitimate and fair” and state that they pertain to “the licensed technologies and intellectual property used in our Indian products.” The company is “committed to working with the authorities to clear up any misunderstanding.”

As part of this investigation, the former head of Xiaomi India, Manu Kumar Jain, has been questioned by the ED. He is currently the Head of Xiaomi in Dubai. The CEO also wanted information on “foreign financing, stock ownership, funding patterns, financial data, and information from the key executives who run the company”, Reuters writes†

As part of the investigations into the Xiaomi case, the company’s headquarters in India were raided in December, the news agency said. Then it turned to suspicions of tax evasion. Many Chinese phone makers had to deal with raids at the time.

According to Reuters, Chinese companies have had more difficult times in India since 2020, after a conflict On the border between the two countries. Since then, India has banned more than 300 Chinese apps, including TikTok, for “security reasons”. The rules for Chinese companies in India have also been tightened since then.