According to those with knowledge of the situation, India has started looking into MG Motor India Private Ltd. on potential financial irregularities, intensifying its investigation into Chinese companies doing business there.
The Ministry of Corporate Affairs has launched an investigation into SAIC Motor Corp Ltd., a local branch of the Chinese automaker. Based on the persons, who asked not to be identified since the information is private, an extensive investigation of the company’s financial accounts revealed suspected related-party transactions, alleged tax evasion, under- and over-invoicing of bills, and other anomalies.
The government will be calling the company’s top executives, including the directors, managing director, and auditors, next month, according to the persons.
The move comes after similar action was taken against other Chinese companies, including Xiaomi Corp., regional subsidiaries of ZTE Corp., Oppo, and Vivo Mobile Communications Co Ltd. The two nuclear-armed neighbours have been at odds ever since the deadliest fighting in decades broke out along their disputed Himalayan border in 2020.
A notification asking for details on the reason the business recorded an operational loss in its first year of operation in 2019-2020, according to MG Motor, was addressed to the company.
The company issued a statement saying, “We completely cooperate with the government authorities on all problems and are in the process of sending the needed records and information to the Registrar of Companies within the stipulated time period.
The business went on to say that no vehicle firm could possibly turn a profit in their first year of business.
As per the MG Motor, whose records were audited, “this is due to the massive capital expenditure necessary and the extended gestation time in a highly competitive market such as India where many multinationals have struggled for decades and have accrued losses.”
For this piece, the ministry declined to comment.More than 300 Chinese mobile applications have been outlawed by Prime Minister Narendra Modi’s administration, including those used on Xiaomi phones and shopping services provided by Alibaba Group Holding Ltd. and ByteDance Ltd.
