New Delhi: The Enforcement Directorate (ED) has seized Rs 5,551.27 crore belonging to Xiaomi Technology India Pvt Ltd, a wholly-owned subsidiary of China-based Xiaomi group, under provisions of Foreign Exchange Management Act, 1999.
The money, lying in bank accounts belonging to the Chinese smartphone giant, was seized in connection with alleged ‘illegal outward remittances’.
“Xiaomi India is a wholly-owned subsidiary of China-based Xiaomi group. This amount of Rs 5,551.27 crore lying in the bank accounts of the company has been seized by the Enforcement Directorate,” ED said in a statement.
According to the agency, the company remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities, including one Xiaomi group entity, in the guise of royalty, Hindustan Times reported.
The huge amounts were remitted in the name of royalties on instructions of Chinese “parent group” entities, ED has alleged.
The agency said Xiaomi India gets fully built mobile sets and other products from manufacturers in India, but had not availed any service from the foreign-based entities to whom such amounts have been transferred.
“It constitutes violation of section 4 of the FEMA,” ED said.
The smartphone company has also been accused of providing “misleading information” to banks while remitting the money abroad.
