ED seizes Rs 5,551 crore of Xiaomi Technology India under FEMA for alleged illegal remittances

ED seizes Rs 5,551 crore of Xiaomi Technology India under FEMA for alleged illegal remittances

New Delhi, April 30, 2022

The Enforcement Directorate (ED) today said it had seized Rs 5,551.27 crore lying in the bank accounts of Xiaomi Technology India Private Limited, a wholly owned subsidiary of Chinese smartphone maker Xiaomi Corp, in connection with alleged illegal remittances made by the company.

The seizure was made under the provisions of the Foreign Exchange Management Act, 1999, a press release from the ED said.

The release said the agency had initiated investigations in connection with the alleged illegal remittances made by the company in February this year.

The company started its operations in India in the year 2014 and started remitting the money from the year 2015.

"The company has remitted foreign currency equivalent to INR 5,551.27 crore to three foreign based entities which include one Xiaomi group entity in the guise of royalty. Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities. The amount remitted to other two US-based unrelated entities were also for the ultimate benefit of the Xiaomi group entities," the release said.

"Xiaomi India is a trader and distributor of mobile phones in India under the brand name of MI. Xiaomi India procures the completely manufactured mobile sets and other products from the manufacturers in India. Xiaomi India has not availed any service from the three foreign based entities to whom such amounts have been transferred.

"Under the cover of various unrelated documentary façade created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitute violation of Section 4 of the FEMA. The company also provided misleading information to the banks while remitting the money abroad," the release added.


Related Stories

No stories found.