China’s Xiaomi says it will protect business interests after India asset freeze By Reuters

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© Reuters. FILE PHOTO: People walk past Xiaomi, a Chinese consumer electronics maker, store in Mumbai, India May 11, 2022. REUTERS/Francis Mascarenhas

MUMBAI (Reuters) – Chinese smartphone maker Xiaomi (OTC:) Corp said on Sunday it was “disappointed” by an Indian order that froze $682 million of its assets and would continue to protect its interests.

An Indian appellate authority on Friday upheld an April order by India’s federal financial crime agency, the Enforcement Directorate, to seize 55.51 billion rupees, saying a investigation had revealed that Xiaomi had made illegal remittances to foreign entities by passing them off as royalty payments.

The Chinese smart device company said in a statement on Sunday that more than 84% of the 55.51 billion Indian rupees seized by the Enforcement Directorate earlier this year was the royalty payment made to the US chipset company. Qualcomm (NASDAQ:) Group

“We will continue to use all means to protect the reputation and interests of the company and our stakeholders,” he said.

The company said that Xiaomi India is a subsidiary and one of the companies of the Xiaomi group, which has entered into a legal agreement with Qualcomm to license IP for the manufacture of smartphones.

Xiaomi and Qualcomm believe it is a legitimate business agreement for Xiaomi India to pay royalties to Qualcomm, the statement said.

With a market share of 18% each, Xiaomi and Samsung (KS:) together dominate the smartphone market in India, the second in the world after China, according to data from Counterpoint Research.

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 apps such as TikTok, and has also tightened rules for Chinese companies investing in India.

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