NEW DELHI: The Enforcement Directorate (ED) has summoned Manu Kumar Jain, a former head of Xiaomi Corp's India operations, in connection with a probe into the company's compliance with foreign exchange laws, the news agency Reuters reported on Tuesday quoting two sources.
According to the Reuters, the ED has been probing Xiaomi since at least February.
Jain, now a global vice president at Xiaomi based out of Dubai, was currently in India, the sources told Reuters, though the purpose of his visit was not clear.
Xiaomi operates multiple apps in India across its phones. In August 2020 several, but not all, of its apps were banned in India, including "Mi Community" and "Mi Browser" apps.
Xiaomi's largest app in India is Zili, a short-form video app operated out of China. Competing short video apps owned and operated out of China, such as TikTok and Snack Video, have been banned, while Zili continues to operate in the country. As a TOI report dated August 30, 2021, had pointed out, the app has access to contacts, location, and other user details.
When Reuters asked about the probe, a Xiaomi spokesperson said the company abides by all Indian laws and was "fully compliant with all the regulations."
"We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information," the statement said.
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 ongoing.
The agency is looking into existing business structures between Xiaomi India, its contract manufacturers and its parent entity in China, according to the first source, who said that fund flows between Xiaomi India and its parent entity, including royalty payments, were being checked.
The Enforcement Directorate, via a notice in February addressed to Xiaomi's Jain, asked for various company documents, the second source familiar with the developments said.
These included details of foreign funding, shareholding and funding patterns, financial statements and information of key executives running the business, the source said.
Xiaomi remains India's top smartphone seller in 2021, with a 24% market share, according to Counterpoint Research. South Korea's Samsung Electronics was the No. 2 brand with a 19% share.
Xiaomi also deals in other tech gadgets in India, including smart watches and televisions.
