Kolkata: As much as ₹4,704.21 crore of Xiaomi Technology India is held up as of December-end as local authorities have attached a few of its bank accounts, its Chinese parent said, underlining that the smartphone maker is open to enter into settlement negotiations.
The wholly owned unit of Xiaomi Corp has been facing investigations and notifications by multiple authorities since December 2021. These include the income tax department, Directorate of Revenue Intelligence, and Directorate of Enforcement. These are in relation to compliance of income tax, Customs duties and foreign exchange regulations.
Xiaomi Corp in its 2024 earnings report said the cases in India are currently in the hearing stages and not yet concluded, adding that it can receive judgments or enter into settlements that may adversely affect operating results or cash flows.
Xiaomi said it has received orders from Indian authorities alleging that it "has inappropriately deducted certain costs and expenses, including purchase costs of mobile phones and royalty fees paid to overseas third parties as well as companies within the group."
"As a result, certain of its (Xiaomi India) bank accounts has been attached and thereby '4,704.21 crore (equivalent to RMB4,016,462,000) has been considered as restrictive as of December 31, 2024," the company said in a statement.
The company noted that its management has assessed matters related to Xiaomi India, taken opinions from professional advisors, and concluded that Xiaomi India has valid grounds to respond to the relevant Indian authorities. "Quantifying the related financial effects is not practical at this stage," the company said.
Xiaomi had a 12% share of India's smartphone market in calendar 2024, giving it the fourth position, with Vivo leading the market followed by Samsung and Oppo, as per market researcher International Data Corporation (IDC).
Xiaomi on Tuesday also reported its sales in India and Europe rose by 26% in calendar 2024.
The company said its global smartphone shipments fell sequentially 0.9% in the December quarter compared to the quarter before, primarily due to lower smartphone shipments in India as Diwali supplies happened in the previous quarter.
The wholly owned unit of Xiaomi Corp has been facing investigations and notifications by multiple authorities since December 2021. These include the income tax department, Directorate of Revenue Intelligence, and Directorate of Enforcement. These are in relation to compliance of income tax, Customs duties and foreign exchange regulations.
Xiaomi Corp in its 2024 earnings report said the cases in India are currently in the hearing stages and not yet concluded, adding that it can receive judgments or enter into settlements that may adversely affect operating results or cash flows.
Xiaomi said it has received orders from Indian authorities alleging that it "has inappropriately deducted certain costs and expenses, including purchase costs of mobile phones and royalty fees paid to overseas third parties as well as companies within the group."
"As a result, certain of its (Xiaomi India) bank accounts has been attached and thereby '4,704.21 crore (equivalent to RMB4,016,462,000) has been considered as restrictive as of December 31, 2024," the company said in a statement.
The company noted that its management has assessed matters related to Xiaomi India, taken opinions from professional advisors, and concluded that Xiaomi India has valid grounds to respond to the relevant Indian authorities. "Quantifying the related financial effects is not practical at this stage," the company said.
Xiaomi had a 12% share of India's smartphone market in calendar 2024, giving it the fourth position, with Vivo leading the market followed by Samsung and Oppo, as per market researcher International Data Corporation (IDC).
Xiaomi on Tuesday also reported its sales in India and Europe rose by 26% in calendar 2024.
The company said its global smartphone shipments fell sequentially 0.9% in the December quarter compared to the quarter before, primarily due to lower smartphone shipments in India as Diwali supplies happened in the previous quarter.
