On Thursday, a crime-fighting agency of India asked the court to re-instate and freeze $725 million in the Indian bank accounts of Xiaomi Corp as it investigates fund transfers by the Chinese smartphone giant.

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As per the Electorate Directorate, Xiaomi had illegally transferred funds from three aboard entities, including one Xiaomi group, which describes their payment ‘in the guise of royalty’. But the high court in the southern state of Karnataka put that decision on hold after Xiaomi challenged it, saying all the royalty payments were legitimate.
The hold decision would continue, for now, a judge of the same court said on Thursday, adding that the agency would make a formal request later in the day to restore the freeze.

“The matter requires a further hearing,” added the judge, Siddappa Sunil Dutt Yadav, who set the next hearing for May 23.
Today, the judge allowed Xiaomi to use a bank overdraft facility for such payments. The agency’s move comes after Xiaomi said in a court filing that its top executives faced threats of ‘physical violence’ and coercion during questioning by enforcement officials, contentions that the agency has dismissed as untrue.