Sunday, August 14, 2022

India’s crackdown on Xiaomi: ED seizes over Rs 5 crore assets

Under the Foreign Exchange Management Act (FEMA), the Enforcement Directorate (ED) seized Rs 5551.27 crore from Xiaomi Technology India Pvt Ltd, a wholly-owned subsidiary of the China-based Xiaomi group, in connection with illegal remittances made by the firm in February this year, the agency said on Saturday.

Xiaomi Technology India Pvt Ltd, which began operations in India in 2014 and began remitting money in 2015, has the seized sum of Rs 5551.27 crore in its bank accounts. According to the ED, the company sent foreign money equivalent to Rs 5551.27 crore to three foreign-based businesses, one of which is a Xiaomi group entity, under the pretence of Royalty.

“Such massive sums in the name of royalties were transferred on the orders of their Chinese parent group organisations.” The money sent to two unconnected businesses in the United States was likewise for the Xiaomi group’s benefit, according to the ED.

Under the brand name MI, Xiaomi India is a trader and distributor of mobile phones in India. Xiaomi India purchases fully assembled mobile phones and other products from Indian manufacturers. Xiaomi India has not received any services from the three foreign-based organisations to whom these funds were sent.

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