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India court rejects Xiaomi’s challenge to $676 million asset freeze

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NEW DELHI (Reuters – 21 April 2023) – An Indian court has rejected Chinese phone maker Xiaomi Corp’s (1810.HK) petition against the seizure of 55.51 billion rupees ($676 million), two sources familiar with the matter told Reuters on Friday.

Xiaomi’s assets in India were frozen last year by the federal financial crime agency which alleged the company had made illegal remittances to foreign entities by passing them off as royalty payments.

“We are studying the matter and waiting for the written order,” a Xiaomi spokesperson said regarding the ruling by a court in Karnataka state, adding the company’s operations in India are compliant with local laws and regulations.

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The company has previously said its royalty payments were all legitimate and that it will “continue to use all means to protect the reputation and interests”.

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Xiaomi has lost its spot as India’s top choice for smartphones to rival Samsung Electronics (005930.KS) as Indian consumers opt for improved features in the world’s second biggest market for the devices.

Chinese companies have also struggled to do business in India since 2020 due to political tensions following a border clash.

India has cited security concerns in banning more than 300 Chinese apps since then, including popular ones such as TikTok, and has tightened rules for Chinese companies investing in India.

($1 = 82.0725 Indian rupees)

Reporting by Tanvi Mehta; Editing by Krishna N. Das

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