India’s anti-money laundering agency seizes $725 million in assets from Xiaomi

(Photo: Gettyimages/GREG BAKER)

On Saturday, April 30, India’s Anti-Money Laundering Agency revealed that it had seized assets worth approximately $725 million from Xiaomi India for violating the country’s foreign exchange laws. .

This incident is a blow to the Chinese phone maker which dominates the smartphone market in the country.

Indian agency seizes Xiaomi assets

India’s Directorate of Law Enforcement or IED said it seized Xiaomi India’s bank accounts after discovering that the telecom company paid $725 million to three overseas-based entities under the guise of payouts. Royalties.

The IED added that such large sums in the name of royalties were paid on the instructions of their Chinese parent group entities, according to Reuters.

The amount paid to two other unrelated US-based entities was also for the benefit of Xiaomi Group entities.

Read also : Xiaomi Mi Fan Festival kicks off in India on Wednesday: Mi 5 and accessories on sale, special offers in tow

The agency, which has been investigating Xiaomi as well as several other Chinese companies since December 2021, said the phone maker provided misleading information to banks when transferring money overseas.

According to Counterpoint, Xiaomi held 23% of the smartphone market share in India in the quarter that ended in March. Its former chief, Manu Jain, was summoned by the agency in January for questioning over tax compliance.

The company has taken a hit in popularity in recent years after India banned Chinese apps on national security grounds, according to Gadgets 360.

For optical metrics, Xiaomi rebranded several of its stores in the country in 2020 with “Made in India” banners in a move analysts said was the phone maker’s attempt to distance itself from its Chinese parent company.

India bans Chinese apps

According to Tech Crunch, the Indian government has banned 59 apps developed by Chinese companies, fearing that these apps may engage in activities that threaten the country’s national security and defense, which “infringes on the sovereignty and integrity of India”.

Among the apps that India’s Ministry of Electronics and Information Technology had ordered to be banned are the following: TikTok – one of its biggest overseas markets in India; Community apps and video calling apps from Xiaomi – the country’s leading smartphone vendor; Alibaba Group’s UC Browser and UC News; Share it; Club Factory – is the third largest e-commerce company in India and ES File Explorer.

This is the first time that the country has ordered to ban several foreign apps. India is the second largest internet market in the world, with nearly half of its 1.3 billion people online.

India’s Computer Emergency Response Team has received numerous representations from citizens regarding data security and privacy breach impacting public order issues.

Tarun Pathak, analyst at Counterpoint, said the order would affect one in three smartphone users in the country. TikTok, Club Friday, UC Browser and other apps combined had over 500 million monthly active users.

Additionally, 27 of those 59 apps were among the country’s top 1,000 Android apps in April. What the “ban” actually means and how mobile operating system makers and internet service providers must comply with it is unclear.

In 2014, Xiaomi suffered a ban on the sale of smartphones in India.

Related article: Xiaomi New Redmi Note 10 Series The most popular product line in India

This article belongs to Tech Times

Written by Sophie Webster

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