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India seizes $725 million in Xiaomi assets for illegal payments



India seizes $725 million in Xiaomi assets for illegal payments


Xiaomi India saw $725 million from its bank accounts seized by the Enforcement Branch over the weekend. The state-owned organization said the Indian division of the Chinese manufacturer handed over the equivalent of INR 55.5 billion to three foreign-based entities in violation of foreign exchange laws.

Manu Kumar Jain, Global Vice President of Xiaomi

Management said that the huge royalty amounts were paid (donated to other parties) by Xiaomi Technology India Private Limited on the instructions of its Chinese parent company. This was done “for the ultimate benefit of the Xiaomi Group” in violation of Rule 4 of the Foreign Exchange Management Act 1999. It states that “no person residing in India shall transfer any foreign currency located outside of India.

Xiaomi India has issued a response, stating that all royalty payments and statements to the bank are legitimate and true. The royalty payments, mentioned by the state agency, are related to the licensed technologies and intellectual property used in the Indian version of Xiaomi products. He also “promised to work closely with government authorities to clear up any misunderstandings.”

Source 1 • Source 2 | Passing by

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