Karnataka HC Rejects Xiaomi’s Petition Challenging $676 Million Asset Freeze by ED: Report

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The Karnataka Excessive Court docket 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 Reside Legislation reported on Friday.

India’s federal monetary crime company froze Xiaomi’s property final 12 months, alleging the corporate had made unlawful remittances to international entities by passing them off as royalty funds. The corporate denies any wrongdoing.

Xiaomi had mentioned in its authorized submitting that the asset freeze “is severely disproportionate and has successfully halted the operations” of the corporate.

Xiaomi and Samsung are market leaders in India’s smartphone market, the world’s second largest after China, based mostly on information from Counterpoint, with an 18 p.c share every.

In October, final 12 months, Xiaomi’s lawyer Udaya Holla had sought to finish the freeze by searching for reduction from the decide, however the courtroom had mentioned the corporate should first present financial institution ensures masking the $676 million in property which might be frozen.

Holla had informed the courtroom such financial institution ensures would imply depositing your entire quantity, making it troublesome for the corporate to operate and pay salaries and make stock purchases forward of the Hindu pageant of Diwali — when shopper gross sales increase in India.

The decide had declined any fast reduction, and had then adjourned the case till October 14. Nargund MB, one in every of India’s Further Solicitor Generals, who was representing the Enforcement Directorate, had urged the courtroom to not grant any fast reduction to Xiaomi, and had additionally requested for the financial institution ensures.

Xiaomi has beforehand mentioned its royalty funds had been all professional and truthful, including it’ll “proceed to make use of all means to guard its popularity and pursuits.”

Many Chinese language corporations have struggled to do enterprise in India as a consequence of political tensions following a border conflict in 2020. India has cited safety issues in banning greater than 300 Chinese language apps since then, together with standard ones akin to TikTok, and likewise tightened guidelines for Chinese language corporations. Investing in India.

© Thomson Reuters 2023

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