Xiaomi India The Chinese electronics maker has announced changes in its Indian team amid the Enforcement Directorate’s eye on the Chinese electronics maker for violating the Foreign Exchange Management Act (FEMA) and sending unauthorized money abroad as royalty.
The company named Chief Operating Officer Muralikrishnan B as its new chairman. Day-to-day operations, services, public affairs and strategic projects will come under the purview of the incoming President and the appointment will be effective from August 1.
Xiaomi also gave additional charge to its chief Business Officer Raghu Reddy as Head of Sales in India, effective from the same date.
The company, which has been on the radar of Indian authorities for its business practices, announced in June that it would be accommodating the internals of the organization.
An announcement at the time said that Anuj Sharma would return as the division’s chief marketing officer, while former Xiaomi Indonesia general manager Alvin Tse would head the Indian division.
Muralikrishnan has been with Xiaomi for many years. He formerly served as Chief Operating Officer of IndiaProperty.com and Jabong India, as well as Senior Vice President at Myntra-acquired Jabong.
Since 2018, Muralikrishnan, an IIM-Calcutta alumnus, has been posted as COO at Xiaomi India. The company said: “Under Muralikrishnan’s able leadership, the company has witnessed strong growth across categories and has substantially enhanced its organizational capabilities, execution machinery and built a solid foothold in the offline retail sector.”
Prior to Xiaomi, Reddy served as Senior Director at Snapdeal and was also a Senior Advisor at Ernst & Young.
Chinese companies under scrutiny
The reshuffle of the Xiaomi India management team took place as government agencies in India are closely monitoring Chinese businesses, including other companies such as Oppo and Vivo, in light of the ongoing border dispute with China.
While the ED is investigating Xiaomi for sending unauthorized funds abroad in the form of royalties, the company has denied any misconduct.
The ED had attached Xiaomi India’s assets worth over Rs 5,500 crore in May this year. It then summoned Manu Jain, who oversaw Xiaomi India for seven years, to investigate whether the company’s business practices comply with the country’s foreign exchange laws. Jain is currently the Group Vice President of the company, holding a position with global responsibilities.
At the time, the Chinese smartphone maker and one of the most popular brands in the Indian market issued a statement saying that the business is fully compliant with all regulations and Indian legal requirements.
Additionally, it said: “We are cooperating with the investigation being conducted by the authorities to ensure that they have all the necessary information.”
In the case of other companies, Indian officials raided dozens of Vivo offices in July. At that time, the ED said that under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, 119 bank accounts linked to Vivo India, totaling Rs 465 crore, were attached.
The line of investigation also followed Chinese telecommunications equipment giant Huawei Technologies Co.
However, after these investigations began, the Chinese embassy in India immediately raised its voice against the “constant investigation”. A spokesman for the Chinese embassy, Counselor Wang Xiaojian, then said that the investigation disrupted normal business activities and “impaired the improvement of the business environment in India” by affecting the “trust and willingness” of foreign entities seeking to do business. “Will do. Country.
Also in May, a spokesman for China’s Foreign Ministry said: “We hope that the Indian side can provide a fair, equitable and non-discriminatory business environment for Chinese companies investing and operating in the country, and in accordance with may investigate and law enforcement. Laws and regulations so as to strengthen the confidence of the international community in investment.”
It was also said at the time that Beijing was “monitoring the matter closely”.
However, this did not stop the ongoing investigation. Recently, the government issued a statement according to which the Directorate of Revenue Intelligence has found that Chinese smartphone maker Oppo has avoided paying customs duty of Rs 43.9 billion.
The statement also said that the authorities found evidence that Oppo had taken advantage of tariff exemptions for goods imported for use in the manufacture of mobile phones and that it had paid royalties that are stipulated by Indian law. Essential was not added to the transaction value of imported goods.
As a result, Oppo India has received a notice requesting payment of customs duty and Revenue Intelligence has also suggested imposition of fines for Oppo India, its employees and Oppo China.
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