FEMA authority approves Xiaomi's Rs 5,551 crore seizure, dubbed as India's biggest ever
The Enforcement Directorate seized Rs 5,551 crore of Xiaomi Technology India Pvt Ltd in April, the biggest seizure of funds in the country till date. ED had issued the order under the FEMA and later sent it for approval of the competent authority.
FollowIndia's foreign exchange authority has confirmed the seizure of Chinese phone maker Xiaomi's Rs 5,551 crore for allegedly sending money abroad, the country's top anti-money laundering body said in a statement. The Enforcement Directorate (ED) issued the seizure order under the FEMA on April 29 and thereafter forwarded it to the appropriate authority for confirmation, as required under the legislation that governs foreign exchange infractions in the nation.
The order has been issued under section 37A of the FEMA against Xiaomi Technology India Private Ltd, the federal agency said in a statement. The agency said, "This is the greatest amount of seizure order confirmed by the authorities in India to date."
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"The authority, while confirming the seizure of Rs 5,551.27 crore, held that the ED is correct in holding that foreign exchange equivalent to Rs 5,551.27 crore has been transferred out of India in an unauthorised manner by Xiaomi India and is held outside India on behalf of the group entity in violation of Section 4 of the FEMA," the agency added.
The competent authorities further stated that the payment of royalty is nothing more than a mechanism for transferring foreign cash out of India, which is a "blatant breach" of FEMA requirements.
Xiaomi India is a wholly-owned subsidiary of the China-based Xiaomi Group and is a dealer and distributor of mobile phones in the nation under the brand name MI.Â
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Xiaomi India had filed a petition before the Karnataka High Court over the funds seizure. The court dismissed the petition in July. The company had told the Karnataka High Court that its top executives faced threats and coercion during questioning by the Enforcement Directorate in the illegal remittances case. The Enforcement Directorate had called the allegations "untrue and baseless".
(With PTI inputs)
