Indian authorities believe that the India division of Chinese smartphone manufacturer Xiaomi Corp. deceived its lender Deutsche Bank AG for years by asserting that it had a royalty payment agreement when, in fact, it did not, according to court records.
Xiaomi’s illegal unauthorized payment details
Since it blocked $670 million of the company’s bank assets after finding that the smartphone vendor sent “illegal payments” to Qualcomm and other parties under the “guise” of royalties, mi and India’s financial crime-fighting agency, the Enforcement Directorate, have been at odds.
Xiaomi, which denies wrongdoing, filed a court petition in India claiming that the payments were legal and that the asset freeze, which was later upheld by an appeals authority, had “essentially halted” its operations in a crucial market.
The matter will be heard again on November 7 after the court in October declined to grant any relief.
The information in Xiaomi’s Oct. 3 court statement sheds new light on the investigation’s conclusions and demonstrates that federal agents suspected anomalies in the manner the India unit sent money to Qualcomm as royalties for licensed technologies like patents.
According to the documents, mi India informed Deutsche that it would not disclose the agreement with the bank for security concerns.
Even though Qualcomm and Xiaomi India’s CFO Sameer B. S. Rao and managing director Manu Kumar Jain at the time acknowledged that no agreement existed,
According to the Xiaomi investigation, the company said Rao and Jain were threatened with “physical assault” while being questioned by the Indian agency, according to Reuters.
