Xiaomi misled Deutsche Bank on ‘illegal’ royalty payments, says ED

NEW DELHI (Reuters) – 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.

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 U.S. chip firm Qualcomm and others in the “guise” of royalties.

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.