India Slams Xiaomi For Deceiving Deutsche Bank

Indian investigators have alleged Chinese smartphone maker Xiaomi Corp.'s India unit misled its banker Deutsche Bank AG for years by claiming it had an agreement for payment of royalties when it had none, legal documents showed.

Photo Insert: Xiaomi denies wrongdoing and approached an Indian court arguing its payments were legitimate and that the assets freeze.

Xiaomi has locked horns with India's financial crime-fighting agency, the Enforcement Directorate, since it froze $670 million of the company's bank assets, saying a probe found the smartphone seller made "illegal remittances" to US chip firm Qualcomm and others in the "guise" of royalties, Aditya Kalra and Munsif Vengattil reported for Reuters.

Xiaomi denies wrongdoing and approached an Indian court arguing its payments were legitimate and that the assets freeze - later confirmed by an appeals authority - had "effectively halted" its operations in a key market.

The court in October declined any relief and the case will next be heard on Nov. 7.

Documents contained in Xiaomi's Oct. 3 court filing shed new light on the investigation's findings, and show federal agents found suspected irregularities in the way its India unit made transfers as royalties to Qualcomm for licensed technologies such as patents.

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