(Yicai) Dec. 25 -- Xiaomi, a Chinese phonemaker, is making moves after denying its involvement in the daily operations of a domestic chip startup under investigation for intellectual property infringement.

A large number of rumors and false reports about a semiconductor company related to Xiaomi have been circulating on the internet in recent days so Xiaomi has collected evidence and reported this irresponsible and completely untrue information to relevant authorities, the Beijing-based hardware maker posted on Weibo yesterday, without disclosing the name of the startup.

However, Yicai learned that the company is called Zunpai Communication Technology, founded in March 2021. Xiaomi’s investment arm Hanxing Venture Capital holds more than 9.8 percent of its equity, per public information.

Xiaomi said that last year, Hanxing made a financial investment in the startup under the spotlight but the firms do not cooperate on IP or technology. Xiaomi was neither the earliest nor is it the largest investor in the chip company as more than 20 institutions, including public industrial development funds, have participated in multiple rounds of financing, the firm added.

Shanghai's public security bureau revealed the case on Dec. 21. In April, local police took away 14 executives, four of whom were arrested on suspicion of trade secret violations, whereas the remaining 10 were released on bail pending trial.

The PBS said that two executives, surnamed Zhang and Liu, had lured former colleagues of another chip firm to join their new startup with high pay and equity while asking them to steal IP to be repurposed for the rivaling company before leaving.

The police report did not mention the name of the original chipmaker. But it could be HiSilicon Technologies because the subsidiary of Huawei Technologies asked a court to freeze the assets of Zunpai and its units in August and the request was fulfilled after review.

Editors: Tang Shihua, Emmi Laine