Karnataka HC declines relief to Xiaomi, company says India operations ‘effectively halted’

Xiaomi has previously said its royalty payments were all legitimate and truthful, adding it will “continue to use all means to protect the reputation and interests.”

An Indian court on Thursday declined to lift a freeze on Xiaomi Corp’s $676 million worth of assets, even as the Chinese smartphone group said this enforcement action had “effectively halted” its operations in its key Indian market.Last week, an appellate body confirmed the seizure.

Xiaomi, which denies any wrongdoing, challenged the asset freeze in the High Court of southern Karnataka state, saying in its legal filing it “is severely disproportionate and has effectively halted the operations” of the company.

Xiaomi and Samsung are market leaders in India’s smartphone market, the world’s second biggest after China, based on data from Counterpoint, with an 18% share each.

Holla told the court such bank guarantees would mean depositing the entire amount, making it difficult for the company to function and pay salaries and make inventory purchases ahead of Hindu festival of Diwali – when consumer sales boom in India.

Xiaomi did not immediately respond to a request for comment.

Xiaomi has previously said its royalty payments were all legitimate and truthful, adding it will “continue to use all means to protect the reputation and interests.”

India has cited security concerns in banning more than 300 Chinese apps since then, including popular ones such as TikTok, and also tightened rules for Chinese companies investing in India.