From being "caged parrots" to "bloodhounds" or the “jewels of law”, as a former Bharatiya Janata Party (BJP) minister put it, the interpretation of unleashing the Central Bureau of Investigation (CBI), Directorate of Enforcement (ED), and the Income Tax (I-T) Department sleuths depends on which side of the spectrum one is on. Chinese smartphone maker Xiaomi found itself at the receiving end of it over the last year. In a series of raids, the I-T Department and the ED froze ~US$1 billion of the company’s funds, alleging tax evasion and money laundering. The financial impact unravelled over the next few months as Xiaomi mounted a legal challenge claiming it had been brought to its knees in the country by these regulatory actions. While the monetary implications became apparent, what went unnoticed was the internal chaos that unfolded at the company. Xiaomi’s Indian operations had seen minimal interference from its headquarters until the raids and the subsequent pandemonium. But the management in Beijing suddenly found itself doing the firefighting. A flurry of top-level exits ensued. Anxiety gripped those who remained. Certain business plans had to be shelved. The internal tumult exacerbated the deleterious impact of bad business decisions made in the past. As we publish this articles newsletter suggest that the Karnataka high court has lifted the I-T Department’s Rs 3,700 crore (~US$450 million) freeze on its deposits. Half the battle won? Not exactly. In today’s in-depth story, The MMS scoops exclusive details of the trials, tribulations, misery, and mayhem unfolding at the company since the raids took place.
