Xiaomi India: Karnataka HC rejects Xiaomi’s plea against ED asset freeze order


In what could be called a setback to Xiaomi, Karnataka High Court has rejected the company’s plea challenging the seizure of Rs 5,551 crore by the Enforcement Directorate (ED), as per a report. ED Xiaomi’s assets last year alleging that the Chinese company made illegal remittances to foreign entities by passing them off as royalty payments.
According to a report by The Economic Times, the court observed that Xiaomi’s “challenge to the constitutional validity is maintainable on grounds that it is violative of article 14 of the constitution, since article 14 is person centric.” A single judge bench of Justice M Nagaprasanna dismissed the petition on merits.

Xiaomi India has denied any wrongdoings and the court granted Xiaomi India the option to appeal under section 37A (5) of the Foreign Exchange Management Act (FEMA).
What’s the case
In October, last year, Xiaomi sought an end to the freeze by seeking relief but the court had said the company must first provide bank guarantees covering the $676 million in assets that are frozen.
Xiaomi had said in its legal filing that the asset freeze “is severely disproportionate and has effectively halted the operations” of the company.

Previously, the Chinese company previously said the royalty payments it made were legitimate and truthful. Xiaomi added that it will “continue to use all means to protect the reputation and interests.”
Samsung’s India smartphone share
According to a report by market research firm Canalys, Xiaomi slipped to fourth place in the India smartphone shipment list. The company shipped 5 million units in the first quarter of 2023.
In the fourth quarter of 2022, Xiaomi came third with 152.7 million shipments and a 13% market share, losing the top spot for the first time since the third quarter of 2017. Earlier this year, Xiaomi said it will launch a slimmer smartphone portfolio in India in 2023.


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