India’s federal financial-crime fighting agency has summoned a former India head of Chinese telecoms company Xiaomi in an investigation into whether the company’s business practices conformed with local foreign exchange laws.
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, 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”.
The statement added: “We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information.”
The actions signal widening scrutiny of the Chinese smartphone maker, whose India office was raided in December in a separate investigation over alleged income tax evasion. Some other Chinese smartphone markers were also raided at the time.
Jain did not respond to a request for comment. India’s Enforcement Directorate also did not respond, though the agency typically does not make details public while investigations are continuing.
The agency is looking into existing business structures between Xiaomi India, its contract manufacturers and its parent entity in China, a source said.
Fund flows between Xiaomi India and its parent entity, including royalty payments, were being checked, the source added.
- Reuters, with additional editing by George Russell