comscore ED asks High Court to re-freeze Xiaomi India's accounts: Report

High Court asked to re-freeze Xiaomi India's accounts: Report

The next hearing date has been pushed to May 23. Until then, the court has decided to continue with its decision to let Xiaomi use the money in its Indian bank accounts


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Enforcement Directorate (ED) has requested the Karnataka High Court to re-instate a freeze on Xiaomi’s bank accounts with Rs 5,550 crore. The move comes days after the Karnataka High Court, in a ruling in favour of Xiaomi India, said that the company’s account should be de-freezed. There were certain conditions attached to the order. Also Read - Xiaomi India's offline sales operations head, Sunil Baby, resigns

According to a report by Xiaomi India, the ED has now requested the Karnataka High Court to reinstate the freeze as it still is conducting investigations on the fund transfers made by the Chinese company. Also Read - Xiaomi devices to receive Android 13 update: Mi 11 Pro, Poco M4 5G, Redmi 10 and more

So far, the court hasn’t moved from its previous stance regarding the freeze. Xiaomi India was allowed to use the money in Indian bank accounts for day-to-day operations and other non-royalty payments. However, the company came to the court saying that some banks were still not allowing them to make transactions, according to the Reuters report. In response, the court has allowed Xiaomi to use a bank overdraft facility for such payments. Also Read - Xiaomi India executives threatened with ‘physical violence’ by govt agency: Report

According to the judge Siddappa Sunil Dutt Yadav, the next hearing date has been pushed to May 23. Until then, the court has decided to continue with its decision to let Xiaomi use the money in its Indian bank accounts.

Recently, a court filing was spotted that mentioned some accusations against the Indian agency. A Reuters report quoting the filing said that a few officials from the Enforcement Directorate had warned Xiaomi India’s former Managing Director, Manu Kumar Jain, and current Chief Financial Officer Sammer B.S. Rao and their families of dire consequences if they do not provide the agency with the statements that they desired. The report suggests that the filing was done on May 4.

The court filing stated that both the executives were “threatened … with dire consequences including arrest, damage to the career prospects, criminal liability and physical violence if they did not give statements as per the dictates of” the agency.

The filing also said that the executives “were able to resist the pressure for some time, (but) they ultimately relented under such extreme and hostile abuse and pressure and involuntarily made some statements.” There’s no clarity regarding the statements that were allegedly forced out of the company executives.

Xiaomi came under ED’s scanner earlier this year, in the month of February. The Indian agency claimed that the company made illegal remittances. The company has been accused of making these remittances from the year 2015, just one year after it entered the Indian market.

Xiaomi India has categorically denied any wrongdoing on its part. The company claims its royalty payments and statements to the bank are legitimate. The brand claims that these royalty payments were for licensed technologies and IPs. They stated that these IPs have been used for Xiaomi products sold in India.

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  • Published Date: May 12, 2022 3:37 PM IST

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