Xiaomi's Assets Worth Rs 5,551.27 Crore Seized by ED Over Forex Violations

The amount had been in bank accounts under the provisions of the Foreign Exchange Management Act, as per the ED.

The Enforcement Directorate on Saturday, 30 April, seized assets worth Rs 5551.27 crore of conumser electronics company Xiaomi.

(Photo Courtesy: Xiaomi)

The Enforcement Directorate on Saturday, 30 April, seized assets worth Rs 5551.27 crore of consumer electronics company Xiaomi.

As per the central agency, the amount had been in bank accounts under the provisions of the Foreign Exchange Management Act, and were connected to illegal outward remittances made by the company.

"ED has seized Rs 5551.27 Crore of M/s Xiaomi Technology India Private Limited lying in the bank accounts under the provisions of Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company," the ED said in a statement.

As per the agency, Xiaomi began its operations in India in 2014 and by 2015, had started remitting the money.

It added, "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," Business Standard quoted.

As per the mobile company, their move was based on instructions of their Chinese "parent group" entities. The amount paid to other two US-based entities were also for the profit of Xiaomi group entities.

However, the ED reportedly added that the manufacturers have not availed any service from the three entities involved in the transaction.

An official statement said, "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."

(With inputs from Business Standard.)