The Enforcement Directorate last week seized the bank assets
of Xiaomi Technology India Private Limited, saying it had found the company
illegally remitted funds to three foreign-based entities, including one Xiaomi
group entity, "in the guise of royalty" payments.
Xiaomi had denied any wrongdoing, saying its "royalty
payments and statements to the bank are all legit and truthful". It later
filed a challenge against the Indian financial crime fighting agency's decision
in the High Court of the southern Karnataka state.
On Thursday, after hearing Xiaomi's lawyers, a judge put a
hold on the Enforcement Directorate's decision, said the two sources, who
declined to be identified as they were not authorised to speak to media.
Xiaomi and the Enforcement Directorate did not immediately
respond to requests for comment. The written court order is not yet public.
The relief was granted on the condition that Xiaomi will
inform Indian authorities of fund transfers such as royalty payments, one of
the sources said.
The case will next be heard on May 12, according to the
Indian court's website.
Xiaomi was India's leading smartphone seller in 2021, with a
24 percent market share, according to Counterpoint Research.
Reuters has reported earlier that Xiaomi's former India head,
Manu Kumar Jain, was summoned and questioned as part of the directorate's
investigation.
Many Chinese companies have struggled to do business in
India due to political tensions following a border clash in 2020. India has
cited security concerns in banning more than 300 Chinese apps since then,
including popular ones such TikTok, and also tightened norms for Chinese
companies investing in India. © Reuters
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