Auditors of Chinese smartphone brands Oppo and Realme have raised several concerns about the financial and operational integrity of their India units, intensifying scrutiny on the firms already under multiple regulatory investigations. The issues were disclosed in recent filings with the Registrar of Companies (RoC). Oppo Mobiles India, the third-largest smartphone brand in the country, was flagged for having a negative net worth of Rs. 3,551 crore as of FY24, driven by accumulated business losses from previous years. The auditor also noted an adverse debt-equity ratio and significant external borrowings, including Rs. 1,668 crore from its Hong Kong-based parent and Rs. 414 crore in loans from HSBC Bank. Current borrowings also stood at Rs. 2,085 crore. The company is reportedly involved in several material litigations and is under regulatory examination, with uncertain outcomes that may impact its financial stability and operational continuity. Raising doubts about long-term viability, the auditor emphasised material uncertainties about Oppo’s ability to continue as a going concern.

Oppo, however, maintains it was profitable in FY24 and expressed confidence in managing short-term cash flow gaps through working capital arrangements or support from its parent. However, any equity infusion would require government approval under Press Note 3, mandated for FDI from neighbouring countries, posing a potential bottleneck in securing timely funds. 

Realme Mobile Telecommunications India, the fifth-largest player in its category in India, was also pulled up by its auditor for procedural lapses and inadequate record-keeping. Concerns were raised about the accuracy of financial accounts, with questions over the completeness of its FY24 profit and loss statement.
 

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