Indian agency summons former head of Xiaomi for investigation

Indian agency summons former head of Xiaomi for investigation

India’s federal financial-crime-fighting agency has summoned a former Indian chief of China’s Xiaomi Corp to probe whether the company’s business practices align with Indian forex laws, two sources with direct knowledge said. Told.

Sources said the Enforcement Directorate has been probing the company since February. Recently, it has asked Manu Kumar Jain, Xiaomi’s former India managing director, to appear before its authorities.

Sources said Jain, now a global vice president at Dubai-based Xiaomi, was currently in India, though his visit’s purpose was unclear.

When asked about the investigation, a Xiaomi spokesperson said the company abides by all Indian laws and “fully complies with all regulations.”

“We are cooperating with the authorities in their ongoing investigation to ensure they have all the necessary information,” the statement said.

The action prompts a wider probe into the Chinese smartphone maker, whose India office was raided in December in a separate probe into alleged income tax evasion. Some other Chinese smartphone markers were also raided at that time.

Jain did not respond to a request for comment. India’s Enforcement Directorate did not respond, although the agency generally does not make details public during ongoing investigations.

The agency is looking into existing business structures between Xiaomi India, its contract manufacturers and its parent entity in China, according to the first source, who said that money flow between Xiaomi India and its parent entity, including royalty payments, was being examined.

The Enforcement Directorate asked for various documents from the company through a notice addressed to Xiaomi’s Jain in February, said another source familiar with the developments.

The source said that these include foreign funding, shareholding and funding patterns, financial statements, and information on key executives running the business.

According to Counterpoint Research, Xiaomi will remain India’s top smartphone vendor in 2021, with a 24% market share. South Korea‘s Samsung Electronics was the No. 2 brand with a 19% share.

Xiaomi also deals in other tech gadgets in India, including smart watches and TVs

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