China’s Ministry of Finance pulls up Xiaomi over accounting errors

The development piles up more investor pressure on Xiaomi’s stock, which is already down by 30% since its July 2018 IPO.

On Tuesday, Chinese authorities disclosed, smartphone maker Xioami Corp had committed accounting errors.

With the news reaching the market, Xioami’s Hong Kong-listed shares turned south midst a wider sell-off of China tech stocks.

In its annual inspection of large internet firms, China’s Ministry of Finance named Xiaomi among several other tech firms, including Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co Ltd, and Suning.Com Co, who had made such errors.

According to a statement from China’s Ministry of Finance, Xiaomi had made errors in taxation while accounting for corporate gifts and significantly, had incorrectly recorded some corporate costs.

The document noted that the firm has already rectified the errors.

China’s Ministry of Finance also noted that some companies had made efforts to evade taxes by shifting their profits overseas.

A Xiaomi spokeswoman declined to comment on the report.

The developments comes in the midst of teething issues Xiaomi is facing following its much-anticipated IPO in July. Its shares are trading 30% lower since its IPO.

Despite the poor performance of its stock, Xiaomi has reported healthy smartphone sales in 2018: earlier this month it stated, it has already surpassed its full-year sales forecast of 100 million handsets.

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