India seizes $725 million property from Xiaomi unit over illegal remittances – TechCrunch

India’s anti-cash laundering agency claimed on Saturday it has seized property truly worth about $725 million from Xiaomi India for breaching the country’s overseas exchange regulations in a main blow to the Chinese cellphone maker that instructions the Indian smartphone industry.

The Indian Enforcement Directorate said it had seized bank accounts of Xiaomi India following acquiring that the corporation experienced remitted $725 million to three overseas-based entities “in the guise of royalty” payments.

“Such huge quantities in the title of royalties were remitted on the directions of their Chinese mum or dad group entities,” it claimed. The volume remitted to “other two US-primarily based unrelated entities” were being also for the “ultimate reward of the Xiaomi team entities,” the agency extra.

The directorate, which has been investigating Xiaomi as well as a number of other Chinese corporations considering that December, said Xiaomi has “provided deceptive information and facts to the financial institutions though remitting the cash overseas.”

Xiaomi, which has yet to comment, commanded 23% of India’s smartphone current market share in the quarter that finished in March this year, according to sector investigate organization Counterpoint. Its previous India head, Manu Jain, was summoned by the directorate earlier this 12 months for questioning around tax relevant compliances.

The enterprise has taken a hit in its level of popularity in the latest a long time pursuing India’s ban on Chinese applications over national safety fears. For optics steps, Xiaomi rebranded a number of of its retailers in India two yrs ago with “Made in India” banners in a shift that analysts explained was the company’s endeavor to length by itself from its Chinese dad or mum business.

The company previously this 7 days updated its smartphone, wise Tv and pill lineups in India.