Karnataka’s Supreme Court has delayed last week’s seizure of $ 725 million (about INR 5.51 kroner) in ED assets from Xiaomi India. Unfortunately, Xiaomi has been facing a lot of challenges in India lately. ED (Enforcement Directorate) accused the company of violating Indian foreign exchange law. According to Xiaomi, India has sent 5,551 kroner to its parent companies in an attempt to evade taxes in the country. As a result, ED confiscated assets worth INR 5551 crore from Xiaomi Technology India Private Limited.
The department claims that the company illegally sent funds to three foreign entities in the form of copyright payments. In addition, one of the recipients of these funds turned out to be an entity of the Xiaomi group. However, Xiaomi denied these allegations in a statement. The company clarified that all its copyright payments and statements to banks are correct and confirm the rules. Xiaomi India has continued to appeal the ED’s decision to the Karnataka Supreme Court. Now, a report from Reuters sheds more light on the challenge.
Karnataka’s Supreme Court has suspended the seizure of Xiaomi India’s assets from ED
The report confirms that on May 5, the Supreme Court of the southern state of Karnataka seized the seizure of ED’s funds from the company’s account. The next hearing is scheduled for May 12, according to the Karnataka court’s website. In response to ED’s action, Xiaomi said it was not doing anything illegal. He also insisted that the copyright payments and bank statements in question were genuine. Although it has received some relief from the Supreme Court, it is worth noting that Xiaomi will have to share details of its royalty payments and transfers with ED and the Indian authorities. On Thursday, a judge adjourned ED’s decision after hearing the company’s lawyers.
This information comes from two unnamed sources who are not authorized to share these details with the media. In particular, Xiaomi has been on the radar of ED since December 2021, after it attacked the company’s office. Interestingly, ED also attacked the offices of Oppo and Huawei. However, the department launched an investigation into Xiaomi India’s activities after finding irregularities in its records. Interestingly, former Xiaomi India CEO Manu Kumar Jain was also investigated for violating India’s currency laws.
According to ED, Xiaomi India has sent money to three entities abroad without benefiting from services. Recall, Xiaomi made its debut in the Indian market in 2014 and is now one of the best smartphone manufacturers in the country. The company has a remarkable 24 percent market share in the smartphone industry in India. In addition, the company’s annual turnover is reported to be around the huge INR of 34,000 kroner.