Sunil Baby, the director of offline sales at Xiaomi India, has left the company. He was instrumental in shaping the company’s offline presence in India. The development follows reports of tax officials freezing deposits worth $478 million lying in local bank accounts of Xiaomi Corp in February as part of a probe into alleged tax evasion.
The China-based smartphone maker was involved in another legal tussle with the authorities after another agency blocked $725 million of its funds for alleged illegal foreign remittances. Xiaomi successfully challenged the freeze.
A Xiaomi India spokesperson told FE Online: “Sunil Baby, senior director, offline sales, has decided to move on due to personal reasons. He was instrumental in shaping Xiaomi India’s offline sales and retail presence. With his strong leadership skills, he strengthened our connect with the partners across the country.”
Xiaomi India Chief Operating Officer Muralikrishnan B will oversee offline sales and distribution, the spokesperson said. “We are confident we will continue to grow our offline presence with the guidance of abled existing leadership. We thank Sunil for his services and wish him luck for his future endeavours.”
Baby’s resignation is the second high-profile departure from the company following Managing Director Manu Kumar Jain who has since been elevated to global VP. Jain was summoned by the Enforcement Directorate to take part in its probe into a Rs 5,500-crore remittance case where the company allegedly paid foreign entities in the guise of royalty payments. The case is currently in court, which has allowed Xiaomi India to make all business-related payments except royalty transactions.
In the Income Tax case, the authorities blocked Rs 3,700 crore in company accounts — a fallout of the December raids at Xiaomi India offices for alleged Income Tax evasion.
The investigation, a Reuters report said citing a source, concerned allegations that the Chinese company purchased smartphones from contract manufactures in India at inflated costs. This allowed it to record a smaller profit by selling the devices to customers and evading corporate taxes.
India has banned over 300 Chinese apps since 2020, following a border clash between the two countries, citing security concerns. It also tightened the norms for Chinese investment in India, leading to China-based companies struggling in India. Xiaomi recently accused the enforcement officials of arm-twisting executives, leading to support from the Chinese government.
Xiaomi is the leader in the Indian smartphone segment with 24% market share in 2021, Counterpoint Research data shows.