Chinese smartphone maker Xiaomi Corp said on Sunday it was “disappointed” by an Indian order freezing its assets worth $682 million and would continue to protect its interests. India’s appeals body on Friday upheld an April order by India’s federal anti-financial crime agency, the Enforcement Directorate, to seize 55.51 billion rupees, saying an investigation found that Xiaomi made illegal transfers to foreign entities by passing them off as royalties .
The Chinese smart device firm 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 were royalties paid to US chipset company Qualcomm Group. “We will continue to use all means to protect the reputation and interests of the company and our shareholders,” it said. The company said Xiaomi India is an associate company and one of the Xiaomi group companies that has entered into a legal agreement with Qualcomm to license IP for smartphone manufacturing.
Both Xiaomi and Qualcomm believe it is a legitimate commercial arrangement that Xiaomi India pays royalties to Qualcomm. With an 18% share each, Xiaomi and Samsung jointly lead the smartphone market in India, which is the second largest in the world after China, according to Counterpoint Research. Many Chinese companies are struggling to do business in India due to political tensions following the 2020 border clash. India has since cited security concerns in banning more than 300 Chinese apps, including popular ones like TikTok, and has also tightened rules on Chinese companies investing in India.
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