Karnataka High Court has rejected China-based Xiaomi’s petition difficult the seizure of $676.35 million (roughly Rs. 5,500 crore) by the Enforcement Directorate, information web site Live Law reported on Friday.
India’s federal monetary crime company froze Xiaomi’s belongings final yr, alleging the corporate had made unlawful remittances to overseas entities by passing them off as royalty funds. The firm denies any wrongdoing.
Xiaomi had stated in its authorized submitting that the asset freeze “is severely disproportionate and has effectively halted the operations” of the corporate.
Xiaomi and Samsung are market leaders in India’s smartphone market, the world’s second greatest after China, based mostly on knowledge from Counterpoint, with an 18 p.c share every.
In October, final yr, Xiaomi’s lawyer Udaya Holla had sought to finish the freeze by searching for reduction from the choose, however the court docket had stated the corporate should first present financial institution ensures masking the $676 million in belongings which are frozen.
Holla had informed the court docket such financial institution ensures would imply depositing your entire quantity, making it tough for the corporate to perform and pay salaries and make stock purchases forward of Hindu pageant of Diwali — when client gross sales growth in India.
The choose had declined any speedy reduction, and had then adjourned the case till October 14. Nargund M B, one among India’s Additional Solicitor Generals, who was representing the Enforcement Directorate, had urged the court docket not to grant any speedy reduction to Xiaomi, and had additionally requested for the financial institution ensures.
Xiaomi has beforehand stated its royalty funds had been all reliable and truthful, including it should “continue to use all means to protect the reputation and interests.”
Many Chinese firms have struggled to do enterprise in India due to political tensions following a border conflict in 2020. India has cited safety considerations in banning greater than 300 Chinese apps since then, together with widespread ones equivalent to TikTok, and likewise tightened guidelines for Chinese firms investing in India.
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