India Fraud Office Recommends Xiaomi Probe

India's Serious Fraud Investigation Office (SFIO) has recommended a detailed examination of Xiaomi's business operations in the country, focusing on alleged irregularities and potential violations of foreign investment rules. The recommendation, outlined in an internal government document, requires approval from India's Ministry of Corporate Affairs before any formal investigation can begin. The proposed probe would scrutinize the movement of funds through Xiaomi's Indian entities, the beneficial ownership of its foreign investors and group companies, and its compliance with foreign direct investment (FDI) regulations. A key area of focus would be whether Xiaomi exercised "de facto control" over Indian sellers on e-commerce platforms and orchestrated exclusive product launches, potentially undermining India's FDI policy for e-commerce. The framework also includes examining financial statements and auditor reports for misstatements and taking statements from current and former executives. The recommendation follows complaints and information received through India's commerce ministry.