Connect with us


Xiaomi’s Allegations of Coercion Baseless, Enforcement Directorate Says



By Press Trust of India | Updated: 7 May 2022

The Enforcement Directorate on Saturday rejected as “baseless” the allegations that the statements of Xiaomi India officials, the wholly-owned subsidiary of Chinese mobile manufacturing company Xiaomi, were recorded “under coercion”, saying the charges were an afterthought.

The federal agency was responding to certain news reports that said Xiaomi alleged in a recent filing before the Karnataka High Court that its top executives were threatened with “physical violence and coercion” during their questioning by ED investigators in Bengaluru.

The Enforcement Directorate (ED) issued a statement saying it was “a professional agency with strong work ethics and there was no coercion or threat to the officers of the company at any point of time”.

“The allegations that the statement of the officials of Xiaomi India was taken under coercion by ED is untrue and baseless.” “The officials of Xiaomi India deposed their statements before ED under FEMA voluntarily in the most conducive environment on various occasions,” the agency said.

It said the statements were deposed by them on the basis of documents and information provided by the company during the course of investigation.

“Their statements corroborate with the written replies submitted to ED and the material on record,” the agency said.

The development comes in the backdrop of ED passing an order on April 29 to seize Xiaomi India’s funds worth over Rs. 5,551 crore over the alleged violation of the Indian foreign exchange law (Foreign Exchange Management Act).

The Karnataka High Court earlier this week stayed this ED order.

The agency added that the statement of Xiaomi global vice president Manu Kumar Jain was recorded on four occasions, April 13, April 14, April 21 and April 26 while that of chief financial officer (CFO) Sameer B S Rao was recorded on six occasions.

Rao’s statement were recorded on March 25, April 14, April 19, April 21, April 22 and April 26, it said.

“However, no complaint was filed by them at any point of time during recording of statements at various occasions.” “Last statement of the officials of the company was recorded on 26.04.2022 and the seizure order was passed on 29.04.2022. It appears that allegation now made after passage of substantial time is an afterthought,” it said.

The agency said the allegations of Xiaomi are “baseless and far from the facts.” Xiaomi is a trader and distributor of mobile phones in the country under the brand name of MI.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.


Multiple Probes Into Chinese Companies Damaging Confidence of Foreign Investors, Chinese Embassy Says



By Reuters | Updated: 7 July 2022

Multiple investigations by Indian enforcement agencies into Chinese companies are damaging the confidence of foreign entities investing and operating in the country, China’s embassy in the South Asian nation has said.

Many Chinese firms have struggled to do business in India after political tension surged following a border clash in 2020. India has cited security concerns in banning more than 300 Chinese apps since, and toughened rules on Chinese investment.

Wednesday’s comments by the embassy follow raids this week by a financial crime fighting agency, the Enforcement Directorate, targeting smartphone maker Vivo, owned by China’s BBK Electronics, in a money laundering investigation.

Such frequent investigation “impedes the improvement of business environment in India and chills the confidence and willingness of market entities from other countries, including Chinese enterprises to invest and operate in India,” the embassy said in a statement.

Raids were conducted at 44 production and operation sites of Vivo and related entities across India, and China was closely following progress, it added.

This week Vivo said it was cooperating with authorities and was committed to full compliance with Indian laws.

Spokespersons for the Indian agency and the government did not immediately respond to requests for comment.

In May, Reuters reported that Xiaomi, one of India’s biggest smartphone sellers, had said in court that its executives faced threats of violence and coercion during agency questioning about accusations of illegal remittances.

Xiaomi has denied wrongdoing, and the agency denied the accusations at the time.

India’s tighter scrutiny also led China’s Great Wall Motor to shelve plans to invest $1 billion (roughly Rs. 7,900 crore) and lay off all employees there this month, after New Delhi denied regulatory approval for purchase of a factory.

© Thomson Reuters 2022

Continue Reading


Samsung Electronics’ Q2 Profit Likely Rose 11 Percent on Solid Server Chip Demand



By Reuters | Updated: 7 July 2022

South Korea’s Samsung turned in its best April-June profit since 2018 on Thursday, underpinned by strong sales of memory chips to server customers even as demand from inflation-hit smartphone makers cools.

Shares of the world’s largest memory-chip and smartphone maker rose 2.5 percent after preliminary results for the second quarter were announced, versus a 1.5 percent rise in the wider market.

Samsung posted an operating profit of KRW 14 trillion (roughly Rs. 85,135 crore), up 11 percent from KRW 12.57 trillion (roughly Rs. 76,430 crore) a year earlier, just shy of a KRW 14.45 trillion (roughly Rs. 87,870 crore) SmartEstimate from Refinitiv. Revenue rose 21 percent to KRW 77 trillion (roughly Rs. 4,67,900 crore), in line with estimates.

The strong quarter for Samsung comes at a time when other chipmakers have warned of a looming chip glut at customers who stocked up during the pandemic to meet higher demand from people working from home.

Chipmakers including Micron and Advanced Micro Devices have also recently signalled waning demand as red-hot inflation squeezes spending.

“Memory chipmakers are expected to build inventory and hike shipments when prices rebound and demand recovers next year”, said Park Sung-soon, an analyst at Cape Investment & Securities.

Prices of specific DRAM chips, used in devices and servers, fell about 12 percent last month from a year ago, according to data provider TrendForce. Prices of NAND Flash chips, used for data storage, are also projected to fall as much as 5 percent in the July-September period from the previous quarter.

Smartphone demand weakens

Rising inflation, concerns about a downturn in major markets, the war in Ukraine and China’s COVID-19 lockdowns have resulted in slowing smartphone sales, leaving server chip demand as the only bright spot, analysts said.

Samsung’s profits have been shielded as large US tech firms such as Amazon, Microsoft, Alphabet’s Google, and Meta that use a lot of data centre services kept buying chips to meet cloud demand, they added.

Making a case for strong server demand, Taiwanese contract electronics supplier and Apple iPhone maker Foxconn on Monday raised its full-year outlook and said it was optimistic about the third quarter.

A strong dollar, which hit a 20-year high, may have also aided Samsung’s chip profits in the second quarter.

Samsung’s chip sales are made mainly in dollars, while it reports its profit in Korean won, so a firm greenback translates to higher chip earnings.

Estimated smartphone shipments by Samsung’s mobile business in the second quarter were about 62-64 million, about 5 percent – 8 percent lower than a March estimate, Counterpoint Research said, as inflation hit smartphone demand.

Samsung shipped 74 million smartphones in the first quarter.

“This trend is the same for major global smartphone makers, although there is variance to some degree … In particular, the hit to the demand for low- and mid-end smartphones seems more severe,” said Jene Park, Senior analyst at Counterpoint.

© Thomson Reuters 2022

Continue Reading


India’s PLI Schemes Reduced Dependency on Mobile Imports by 33 Percent in FY22: Report



By PTI | Updated: 7 July 2022

The phased manufacturing programme and the production-linked incentive scheme have gone a long way to cut mobile imports that fell by 33 percent in fiscal 2022, and pushed local production up by around 26 percent during the year, says a report.

A Crisil report said that local production of mobile phones has been logging in a 33 percent annual growth rate between fiscals 2016 and 2021, the pace of which slowed a tad in FY22 to 24-26 percent.

This growth is in spite of the ongoing chip shortage, and three of the global manufacturers met the PLI production targets in FY22.

According to the rating agency, the trend is due to the phased manufacturing programmed and the production-linked incentive scheme launched by the government.

Crisil has projected the growth momentum in production to sustain, with a 22-26 percent annual growth rate between fiscals 2022 and 2024 to Rs. 4-4.5 lakh crore in value terms. Growth will be led by the PLI scheme, which is in the second year for most players, it added.

Mobile imports fell 33 percent year-on-year in fiscal 2022 and the dependency on China came down to 60 percent from 64 percent in fiscal 2021, and the same is expected to fall further in the medium-term, the report said.

But, with rising production, electronic components imports, essential for mobile assembling/manufacturing, also jumped 27 percent year-on-year.

However, the report said that despite such massive jump in local production, as much as 60 percent of phones/components imports came from China in FY22, down from 64 percent in the previous fiscal.

As per the report, India has negligible share (under 1 percent) in global supplies, which is topped by China at over 70 percent and Vietnam (16 percent). Indian exports constituted 1 percent of Japanese demand, 3 percent of Germany’s imports and 9 percent of the UAE demand in 2021.

As against this, the top five mobile importing countries (the US, Hong Kong, Japan, Germany, and, the UAE) accounted for 50 percent of global handset imports in 2021, with China and Vietnam meeting the bulk of their demand.

The US is the largest importer of mobile phones, accounting for 20 percent of global shipments, followed by Hong Kong at 15 percent and Japan at 6 percent. China alone meets 79 percent of the US demand and Vietnam supplies 16 percent.

Last fiscal was significant as mobile exports from India surged 56 percent year-on-year with support from the two schemes. Exports are expected to grow further and touch Rs. 1-1.2 lakh crore over fiscals 2023 and 2024, as per the report.

However, Indian exports largely comprise low-end phones, priced below Rs. 10,000.

Major markets such as the US, Hong Kong and Japan import phones priced upwards of Rs. 15,000. However, the agency expects exports to receive a leg-up in the medium term with foreign majors such as Samsung and Apple, and domestic players ramping up their manufacturing and assembling in the country.

During 2017-22, smartphone sales in the country surged from 113 million to 159-161 million. Shipment of feature phones, on the other hand, fell to 88-90 million from 140 million during the period. The decline can be attributed to a three-fold increase in 4G subscribers.

The report also said that the rising domestic output has led to the country becoming largely self-sufficient on the consumption front. In fiscal 2022, the country saw a 15-20 percent increase in mobile consumption to Rs. 2.5 lakh crore, led by a fall in the lifecycle of the handsets, increasing digitalisation, and easy financing terms.

Continue Reading


Vivo India Directors Said to Leave Country as ED Intensifies Money Laundering Probe



By ANI | Updated: 7 July 2022

Vivo India directors Zhengshen Ou and Zhang Jie left the country as the Enforcement Directorate intensified its inquiry into the money laundering case against the Chinese firm, said sources.

The information comes a day after the agency carried out searches at 40 locations in connection with the case.

The federal agency on Tuesday conducted searches at 40 locations in Uttar Pradesh, Madhya Pradesh and some southern states in connection with a case linked to Vivo Mobile Communications and some other Chinese firms.

The case is already being investigated by the Central Bureau of Investigation (CBI).

IT department, as well as the Ministry of Corporate Affairs, is also keeping a close eye on the Chinese manufacturing firms. The ED raid is an extension of the probe against Chinese firms.

The ED conducted these searches with respect to violations of the Prevention of Money Laundering Act (PMLA).

Sources said that local units of Vivo Mobile Communications are under the radar for alleged financial improprieties as part of an investigation into other China-based firms.

The Ministry of Corporate Affairs is learnt to have a special focus on potential violations including fraud.

In the case of Vivo, an inquiry was sought in April this year to detect if there were “significant irregularities in ownership and financial reporting”.

Further investigations are underway.

Meanwhile, China on Wednesday expressed hope that India will conduct the ongoing investigations into the Chinese mobile manufacturer firm Vivo in accordance with the law and regulations and provide a “fair” and “non-discriminatory” business environment to China’s firms.

Asked about the ongoing raids on Vivo offices in several locations in India, Chinese Foreign Ministry spokesman Zhao Lijian told a media briefing here that the Chinese side is closely following the developments on this matter.

“As I have stressed many times, the Chinese government always asks Chinese companies to abide by laws and regulations when doing business overseas,” he said.

Continue Reading


Apple to Release New Lockdown Mode to Battle Spyware, Provide Extra Layer of Protection



By Reuters | Updated: 7 July 2022

Apple on Wednesday said it plans to release a new feature called Lockdown Mode this fall that aims to add a new layer of protection for human rights advocates, political dissidents and other targets of sophisticated hacking attacks.

The move comes after at least two Israeli firms have exploited flaws in Apple’s software to remotely break into iPhones without the target needing to click or tap anything. NSO Group, the maker of the Pegasus software that can carry out such attacks, has been sued by Apple and placed on a trade blacklist by US officials.

Lockdown Mode will come to Apple’s iPhones, iPads and Macs this fall and turning it on will block most attachments sent to the iPhone’s Messages app. Security researchers believe NSO Group exploited a flaw in how Apple handled message attachments. The new mode will also block wired connections to iPhones when they are locked. Israeli firm Cellebrite has used such manual connections to access iPhones.

Apple representatives said that they believe sophisticated attacks the new feature is designed to fight — called “zero click” hacking techniques — are still relatively rare and that most users will not need to active the new mode.

Spyware companies have argued they sell high-powered technology to help governments thwart national security threats. But human rights groups and journalists have repeatedly documented the use of spyware to attack civil society, undermine political opposition, and interfere with elections.

To help harden the new feature, Apple said it will pay up to $2 million (nearly Rs. 15 crore) for each flaw that security researchers can find in the new mode, which Apple representatives said was the highest such “bug bounty” offered in the industry.

Apple also said it is making a $10 million (nearly Rs. 80 crore) grant, plus any possible proceeds from its lawsuit against NSO Group, to groups that find, expose and work to prevent targeted hacking. Apple said the grant will go to the Dignity and Justice Fund established by the Ford Foundation, one of the largest private foundations in the United States.

© Thomson Reuters 2022

Continue Reading


Micron Forecasts Q4 Earnings Below Expectations, Raises Concern About Chip Down Cycle



By Reuters | Updated: 1 July 2022

Memory-chip firm Micron Technology announced a significantly weaker than expected business outlook on Thursday, raising concern that following nearly two years of strong demand, the industry was turning towards a down cycle.

Micron forecast adjusted revenue for the current quarter at $7.2 billion (nearly Rs. 56,800 crore), plus or minus $400 million (nearly Rs. 3,200 crore), while Wall Street’s outlook was an average of $9.05 billion, according to Refinitiv IBES data.

“We believe that demand has weakened considerably and we’ve seen that even in the areas that have been significantly constrained,” Nikolay Todorov, analyst at Longbow Research, said. “Micron will essentially start or signal that the semiconductor cycle is turning.”

Shares of the Boise, Idaho-based company initially fell 6.3 percent in extended trading but later pared some losses. Summit Insights Group analyst Kinngai Chan said the stock was holding up as some investors see this as the bottom of the cycle. “We, however, believe there’s more downside risk to earnings as our industry checks suggest possible further industry pricing pressure through 1H23,” he said.

While Micron executives were confident about demand for their chips in the long term, they were hunkering down for a tough road ahead by cutting the amount of chips they make to ensure chip prices. While Micron did not provide any numbers, it said it will reduce spending on manufacturing of chips in fiscal year 2023 which starts in September.

“I think the extent of the shift has definitely been bigger than anyone was anticipating in the ecosystem,” Micron’s chief business officer, Sumit Sadana, told Reuters. “These changes are rippling through the ecosystem now.”

Sadana said during the earnings call that China’s lockdown is causing a 30 percent drop in Micron’s China revenue for the current quarter, and a drop of 10 percent in total revenue.

The outlook for memory chip makers has worsened in recent months as surging inflation, China’s cooling economy and the Russia-Ukraine war hit consumer spending on smartphones and personal computers, a crucial market for the industry. Sadana said the demand for that segment was worse than expected.

That has driven down chip prices and led to a buildup of inventories, with research firm TrendForce estimating a drop of 3 percent to 8 percent in prices of DRAM chips during the third quarter of 2022.

Sadana said Micron will hold a portion of chips it has already produced in the warehouse rather than releasing them to the market, and supplement any supply shortage that could occur as it cuts back chip production.

“We don’t mind holding this inventory and it’ll enable us to just drive better pricing discipline in the market,” Sadana told Reuters.

DRAM chips — widely used in data centres, personal computers and other devices — account for two-thirds of Micron’s revenue, and the company also makes NAND memory chips that serve the data storage market.

The company expects adjusted profit for the quarter of $1.63 (nearly Rs. 130) per share, plus or minus 20 cents, compared with estimates of $2.57 (nearly Rs. 200) per share.

© Thomson Reuters 2022

Continue Reading