India’s Serious Fraud Investigation Office has recommended a detailed investigation into Xiaomi’s business in the country, according to an internal document examining how money moved through the company’s Indian operations and whether it obtained the approvals required for Chinese investment.
The document was drafted in May and reviewed by Reuters, which reported its contents on Wednesday. But the recommendation does not mean the SFIO has found that Xiaomi did anything wrong, and no investigation has been announced yet.
The document identifies four areas for examination: the movement of funds through Xiaomi’s Indian entities; whether the company obtained the approvals required for investment from countries that share a land border with India.
The beneficial ownership of its foreign investors and group companies; and whether it complied with India’s foreign direct investment rules more broadly.
The last point includes whether Xiaomi exercised de facto control over Indian sellers on e-commerce platforms while presenting those relationships as independent.
