Xiaomi’s Rs 5,551 Crore Assets Seized Over Forex Violations: Probe Agency

Xiaomi India is a dealer and distributor of cell phones in India underneath the model identify MI.

New Delhi:

Central probe company Enforcement Directorate (ED) in the present day seized over Rs 5,500 crore from Chinese smartphone big Xiaomi over violations of the Indian overseas alternate legislation. The motion has been taken in opposition to Xiaomi Technology India Private Limited. The firm (additionally referred to as Xiaomi India) is a dealer and distributor of cell phones within the nation underneath the model identify MI.

The ED seized Rs 5,551.27 crore from the financial institution accounts of the corporate underneath the provisions of the Foreign Exchange Management Act, 1999.

Soon after the information broke, Trinamool MP Mahua Moitra attacked the Center saying Xiaomi was allowed to donate Rs 10 crore to the “opaque” PM CARES fund and her social gathering’s questions on the identical have been “stonewalled” within the Parliament.

The central probe company had initiated an investigation in reference to “illegal remittances” made by the corporate in February this yr.

The firm began its operations in India in 2014 and began remitting the cash in 2015. It has to date remitted overseas foreign money equal to Rs 5,551.27 crore to 3 foreign-based entities, which embody one Xiaomi group entity, within the guise of royalty, the probe company mentioned.

“Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities,” the ED mentioned. The quantity remitted to the opposite two US-based unrelated entities was additionally reportedly for the final word advantage of the Xiaomi group entities.

Xiaomi India is a dealer and distributor of cell phones in India underneath the model identify MI. It procures the utterly manufactured cellular units and different merchandise from the producers in India. “It has not availed any service from the three foreign-based entities to whom such amounts have been transferred,” the ED mentioned.

Under the duvet of varied unrelated documentary facades created amongst the group entities, the corporate remitted this quantity within the guise of royalty overseas which constitutes a violation of Section 4 of the FEMA.

The mentioned part of the civil legislation of FEMA talks about “holding of foreign exchange.” The ED additionally accused the corporate of offering “misleading information” to the banks whereas remitting the cash overseas.

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