New Delhi: India’s federal financial-crime fighting agency has summoned a former India head of China’s Xiaomi Corp in an investigation of whether the company’s business practices conformed with Indian foreign exchange laws, two sources with direct knowledge told Reuters.
The Enforcement Directorate has been probing the company since at least February, and in recent weeks asked Manu Kumar Jain, Xiaomi’s former India managing director, to appear before its officers, the sources said.
Jain has been asked to appear before the investigators by 11 am on Wednesday at its Delhi headquarters.
ED is learnt to have issued summons to Jain earlier asking him to join the investigation against the firm.
Sources said that the agency has started an investigation against the firm in February this year based on some specific inputs and that the former India head of China’s Xiaomi Corp, Jain, is asked to share details related to the investigation of whether the company’s business practices conformed with Indian foreign exchange laws.
Jain, now a global vice president at Xiaomi based out of Dubai, was currently in India, the sources said, though the purpose of his visit was not clear. Asked about the probe, a Xiaomi spokesperson said the company abides by all Indian laws and was “fully compliant with all the regulations.”
ED actions indicate its widening scrutiny of the Chinese smartphone maker, whose India office was raided in December last year in a separate investigation over alleged income tax evasion. Some other Chinese smartphone markers were also raided at the time.
As per sources, the ED is probing the existing business structures between Xiaomi India, its contract manufacturers and its parent entity in China, as well as various other things including fund, flows between Xiaomi India and its parent entity.
Xiaomi is among the biggest of India’s smartphone sellers and the firm reportedly was on top in selling smartphones in India in 2021 followed by South Korea’s Samsung Electronics. Xiaomi also deals in other tech gadgets in India, including smartwatches and televisions.