India issued a formal notice: Xiaomi 4.8 billion yuan of funds may be confiscated

Thanks to CTOnews.com netizen drcge, soft media new friend 1933769, aviation sir, rain and snow, Hbp, HZQ9584, fallen literati, Xiao Zhan cut, Coje_He, Shenzhen Liangzai, MissBook, Manx, deep sea heart clue delivery! CTOnews.com June 13 news, According to Nandu Bay financial news agency reported, India responsible for combating financial crime has 11 to Chinese mobile phone manufacturer Xiaomi technology in India branch, company head and three banks (Deutsche Bank, HSBC and Citibank) issued a formal notice, Said India accused them of illegal transfer of funds abroad, Suspected of violating the "Foreign Exchange Management Law." The agency said the three banks were notified because they were suspected of allowing offshore remittances to be paid as royalties without conducting due diligence and obtaining the necessary documents.

According to previous disclosures, India's Central Enforcement Directorate has frozen 55.51 billion Indian rupees (CTOnews.com note: about 4.81 billion yuan) from Xiaomi's bank account. This notice may mean that the frozen funds will be formally confiscated.

India's investigative agency said Xiaomi's Indian affiliate violated India's foreign exchange regulations by disguising the remittances as royalties. Xiaomi insisted that the remittances were legal and said it would "continue to use all means to protect its reputation and interests."

The investigation agency also accused the three banks of failing to conduct the necessary due diligence and obtain relevant documents when allowing Xiaomi to make these remittances.

In May 2022, India's Anti-Money Laundering Executive Authority accused Xiaomi and its Indian subsidiaries of making remittances to three overseas entities, including Xiaomi Group, in the name of "paying copyright fees" since 2015, which "violated" India's Foreign Exchange Management Act, so law enforcement authorities seized the relevant account assets of Xiaomi subsidiaries. Xiaomi told the court at the time that Indian investigators had frozen its assets in several banks, which had a "seriously disproportionate" impact on its operations in India. Xiaomi India said,"We have carefully studied the order of the authorities and we believe that the royalties and bills we paid to the bank are legal and true." These royalties paid by Xiaomi India are for licensed technology and intellectual property used in our Indian version of the product. For Xiaomi India, paying such royalties is a legitimate business practice. Of course, we will work closely with the government to clarify any misunderstandings." But in April, an Indian court rejected Xiaomi's request to unfreeze its assets.