ED seizes Xiaomi's assets worth Rs 5,551 crore over forex violations

By Team Newsable | First Published Apr 30, 2022, 3:22 PM IST

The ED launched an inquiry in February this year into suspected illicit remittances made by M/s Xiaomi Technology India Private Limited, a fully owned subsidiary of the China-based Xiaomi group.

The Enforcement Directorate on Saturday has seized Rs 5551.27 crores of Xiaomi Technology India Private Limited, lying in the bank accounts under the provisions of the Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company.

The ED launched an inquiry in February this year into suspected illicit remittances made by M/s Xiaomi Technology India Private Limited, a fully owned subsidiary of the China-based Xiaomi group. "The firm began operations in India in 2014 and began remitting funds in 2015. The Company has paid foreign cash equivalent to INR 5551.27 Crore to three foreign-based organisations, one of which is a Xiaomi group firm operating under the pretence of Royalty," the company claimed.

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Such massive sums in the name of royalties were paid on the directions of their Chinese parent group organisations. The funds sent to two unrelated organisations in the United States were also for the benefit of the Xiaomi group firms, according to the ED.

Xiaomi, one of the country's leading mobile phone brands, with an annual revenue of Rs 34,000 crore. The funds were taken from Xiaomi's four bank accounts in accordance with the rules of the Foreign Exchange Management Act of 1999. "The total sum was in its four bank accounts at HSBC, Citi Bank, IDBI, and Deutsche Bank," according to an official source.

"The total sum was in its four bank accounts at HSBC, Citi Bank, IDBI, and Deutsche Bank," according to an official source.

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