ED reportedly asks court to reinstate freeze on Xiaomi’s bank assets worth $725 million
India’s financial crime agency on Thursday asked a court to reinstate a $725 million (about Rs 5,624 crore) freeze on Xiaomi’s Indian bank accounts as it investigates the money transfers by the Chinese smartphone giant.
The enforcement branch had seized the money saying that Xiaomi had illegally transferred funds overseas to three entities, including one in the Xiaomi Group, describing them as “royalty” payments.
But the high court in the southern state of Karnataka suspended the ruling after Xiaomi challenged it, saying all royalty payments were legitimate.
The stay decision would continue for now, a judge in the same court said Thursday, adding that the agency would make a formal request later in the day to reinstate the freeze.
“The case requires a new hearing,” added the judge, Siddappa Sunil Dutt Yadav, who set the next hearing for May 23.
A Xiaomi spokesperson did not immediately respond to a request for comment.
Xiaomi’s lawyers told the court that the banks did not allow the company to make the necessary payments, even though the court allowed it to use the funds for purposes other than paying royalties.
On Thursday, the judge allowed Xiaomi to use a bank overdraft facility for such payments.
The agency’s decision comes after Xiaomi said in a court filing that its top executives were threatened with “physical violence” and coercion during interrogation by law enforcement officials, claims that the agency rejected as false.
© Thomson Reuters 2022
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