In a recent audit of Chinese smartphone manufacturers, Oppo and Realme, concerns were raised over the financial and operational integrity of their Indian arms. The companies were pulled up for irregular record keeping, bookkeeping and processes, as disclosed in the filings with the Registrar of Companies (RoC), as reported by The Economic Times.
Oppo, which was once competing for the top spot in terms of market share in the Indian smartphone space, was flagged for having a negative net worth of Rs 3,551 crore in the financial year 2024 (FY24). The auditors state that the negative net worth is courtesy of the losses accumulated from previous years. The auditors also reported an adverse debt-equity ratio, significant external borrowing that includes Rs 1,668 crore from its headquarters in Hong Kong and loans worth Rs 414 crore from HSBC Bank. The current borrowings also stand at Rs 2,085 crore.
The auditors note that a host of material mitigations and regulatory examinations in which Oppo is involved may affect the company’s future plans for India, considering the audit data. Oppo, however, says that it had a profitable financial year in FY2024 and is looking to manage the short-term cash flow gaps through working capital arrangements and infusing funds from the parent company.
What trouble is Realme in?
Realme, which is a sister company of Oppo and currently occupying the fifth spot in the Indian smartphone market, was flagged for procedural lapses and inadequate record-keeping for the financial year 2024. Realme, however, is yet to comment.
