Sunday 4 December 2022
- Advertisement -
EconomyBusinessXiaomi assets seizure worth Rs 5,551 crore in April confirmed today

Xiaomi assets seizure worth Rs 5,551 crore in April confirmed today

The authority of the country has confirmed the seizure Rs 5,551 crore of Chinese phone maker Xiaomi for allegedly sending money overseas illegally, the country's topmost money laundering prevention body said in a statement today. The Enforcement Directorate (ED) seized Rs 5,551 crore of Xiaomi Technology India Pvt Ltd in April, the biggest seizure of funds in the country till date.

The authority under the Management Act (FEMA) has confirmed that ED was right in seizing the assets of Xiaomi that allegedly transferred out of India illegally, the probe agency said.

The FEMA guides all transactions in India. The ED said the foreign exchange authority agreed that the manner in which Xiaomi India held funds outside the country on behalf of the group entity violated the foreign exchange management law, and this led to the seizure of funds of the Chinese company.

In April, the ED had said Xiaomi India had sent the funds overseas "in the guise of royalty", which was a violation of the FEMA. "The competent authority appointed under section 37A of the FEMA has confirmed the seizure order of Rs 5551.27 crore (dated 29.04.2022) passed by the Directorate of Enforcement against Xiaomi Technology India Private Limited under the provisions of FEMA," the ED said in the statement today.

Xiaomi India is a fully owned arm of China-based Xiaomi group, which has stakes of members of the ruling Communist Party of China (CCP). It started operations in India in 2014 and began sending money abroad a year later. "Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities. The amount remitted to two other US-based unrelated entities were also for the ultimate benefit of Xiaomi group entities," the ED said in the statement today.

Xiaomi India has not used any service from the three foreign entities to whom the funds have been sent, the ED said, explaining that the phonemaker also gave misleading information to banks while sending money abroad.

Xiaomi India had filed a petition before the High Court against the funds seizure. The court dismissed the petition in July.

In May, Chinese state had demanded that India stop "regulatory assault" on Chinese companies after Xiaomi Corp alleged threats of "physical violence". Xiaomi had told the high court that its top executives faced threats and coercion during questioning by the ED in the illegal remittances case. The ED had called the allegations "untrue and baseless".

Click/tap on a tag for more on the subject


Of late

More like this