• search
For Quick Alerts
For Daily Alerts

ED seizes Chinese smartphone giant xiaomi's assets worth Rs 5,551 crore

Google Oneindia News

New Delhi, Apr 30: The Enforcement Directorate (ED) has seized Rs 5,551.27 crore of smartphone giant Xiaomi India for alleged "illegal outward remittances".

Representational Image

The action has been taken against Xiaomi Technology India Private Limited. The company (also called Xiaomi India) is a trader and distributor of mobile phones in the country under the brand name of MI.

"Xiaomi India is wholly owned subsidiary of China-based Xiaomi group. This amount of Rs 5,551.27 crore lying in the bank accounts of the company has been seized by the Enforcement Directorate," said the ED in a statement.

"The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign based entities which include one Xiaomi group entity, in the guise of royalty," the ED said.

Such huge amounts in the name of royalties were remitted on the instructions of their Chinese "parent group" entities, it alleged.

"The amount remitted to other two US-based unrelated entities were also for the ultimate benefit of the Xiaomi group entities," the ED said.

The seizure of funds has been done under relevant sections of the Foreign Exchange Management Act (FEMA) after a probe was launched by the federal agency against the company in connection with alleged "illegal remittances" sent abroad by the Chinese firm in February.

The ED said while Xiaomi India procures completely manufactured mobile sets and other products from the manufacturers in India it has not availed any service from these three foreign based entities to whom such amounts have been transferred.

"Under the cover of various unrelated documentary facade created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitute violation of section 4 of the FEMA," it said.

The said section of the civil law of FEMA talks about "holding of foreign exchange."

The ED also accused the company of providing "misleading information" to the banks while remitting the money abroad.

For Daily Alerts
Best Deals and Discounts
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X