By Arpan Chaturvedi and Krishn Kaushik
NEW DELHI (Reuters) -Indian&nbsp;police&nbsp;have formally&nbsp;accused&nbsp;Chinese&nbsp;smartphone makers Xiaomi Corp and Vivo Mobile of helping transfer funds illegally to a&nbsp;news&nbsp;portal&nbsp;under investigation on charges of spreading&nbsp;Chinese&nbsp;propaganda, documents showed on Friday.
A Xiaomi India spokesperson strongly denied the accusation. A spokesperson from Vivo did not respond immediately to repeated requests for comment.&nbsp;NewsClick said the allegations were "untenable and bogus".
Media rights and opposition groups in India have said the investigation into&nbsp;NewsClick and surrounding accusations are part of a crackdown on the press - a charge dismissed by the government.
The allegations were laid out in a&nbsp;police&nbsp;complaint that was filed on Aug. 17.
It was shared with lawyers for people named in the complaint on Friday, days after officers raided&nbsp;NewsClick's New Delhi office and journalists' homes, then arrested its founder-editor Prabir Purkayastha and a senior administrative official.
The complaint, a copy of which has been seen by Reuters,&nbsp;accused&nbsp;NewsClick's Purkayastha of conspiring with a little-known voluntary group to disrupt India's sovereignty and cause disaffection.
The&nbsp;police&nbsp;document said, as part of this plan, large amounts of funds were received from China to push biased&nbsp;news&nbsp;criticising&nbsp;Indian&nbsp;policies and projects and defending&nbsp;Chinese&nbsp;policies and programmes.
&ldquo;It is further learnt that big&nbsp;Chinese&nbsp;Telecom companies like Xiaomi, Vivo, etc. incorporated thousands of shell companies in India in violation&rdquo; of India&rsquo;s foreign currency laws &ldquo;for illegally infusing foreign funds in India in furtherance of this conspiracy,&rdquo; the complaint said.
A senior&nbsp;police&nbsp;officer confirmed the document was genuine and that it made allegations about those two companies.
"BASELESS, ABSURD"
"We have no knowledge about this. We strongly deny the said allegation against Xiaomi in the FIR," the spokesperson for Xiaomi India said, referring to the First Information Report as a&nbsp;police&nbsp;complaint is formally called in India.
"Xiaomi conducts its business operations with utmost respect to, and in strict compliance of applicable laws. Any allegation of conspiracy is completely baseless," the spokesperson said.
Xiaomi and Vivo are among India's biggest phone brands.
The&nbsp;police&nbsp;document did not go into further detail about how the information had been learned, set out any proof of the companies' involvement or say what steps the&nbsp;police&nbsp;were now considering.
NewsClick said this week it does not publish any&nbsp;news&nbsp;or information at the behest of any&nbsp;Chinese&nbsp;entity or authority. Its lawyers have challenged the complaint in the Delhi High Court.
"The completely absurd nature of allegations in the FIR clearly show that the proceedings initiated against&nbsp;NewsClick are nothing but a blatant attempt to muzzle the free and independent press in India,"&nbsp;NewsClick said in a statement on Friday.
"NewsClick has full faith in the judicial system of India and is confident that its stand will be vindicated," it added.
China has dismissed accusations of interference in India in the past and has urged New Delhi to provide a fair and non-discriminatory environment for&nbsp;Chinese&nbsp;companies.
Ties between India and China have nosedived since a 2020 military clash on their disputed Himalayan border in which 20&nbsp;Indian&nbsp;soldiers and four&nbsp;Chinese&nbsp;troops were killed.
Although border tensions have since reduced after several rounds of military and diplomatic talks, New Delhi says relations cannot return to normal until there is complete disengagement and de-escalation.
(Additional reporting by Munsif Vengattil in Bengaluru; Editing by YP Rajesh and Andrew Heavens)

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Indian police accuse Chinese telcos of funding investigated news portal