India’s federal financial crime fighting agency, the Enforcement Directorate (ED), has summoned a former head of Xiaomi Corp’s India operations to investigate whether the company’s business practices complied with the country’s foreign exchange laws, according to two sources cited by Reuters on Tuesday.
It has been revealed that the ED has been investigating the company since at least February, and in recent weeks it asked Manu Kumar Jain, Xiaomi‘s former India managing director, to cooperate with the investigation. Jain is currently a global vice president at Xiaomi based in Dubai. He is currently in India, according to sources, although the purpose of his visit is unclear.
A Xiaomi spokesman issued a statement, assuring that the company conforms with all Indian laws and is fully compliant with all regulations. “In addition, we are cooperating with the ongoing investigation conducted by authorities ensuring they have all the necessary information,” the statement explained.
The latest actions underscore widening scrutiny of major Chinese smartphone makers by the Indian authorities. The local offices and manufacturing plants of Xiaomi and OPPO were raided in December 2021 as part of a separate investigation over alleged income tax evasion. Huawei was also raided by Indian tax authorities in February of this year.
According to market research firm Counterpoint Research, Xiaomi remained India’s top smartphone seller in 2021, with a 24% market share, while South Korea’s Samsung ranked second with a 19% share.