Xiaomi misled Deutsche Bank, says India

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 $670m 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. 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.