Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI.New Delhi: The probe agency Directorate of Enforcement (ED)
Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI.
New Delhi:
The probe agency Directorate of Enforcement (ED) today seized Rs 5,551.27 crore of smartphone giant Xiaomi under the provisions of the Foreign Exchange Management Act, 1999. Xiaomi India is a wholly-owned subsidiary of the 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 ED.
ED had initiated an investigation in connection with the illegal remittances made by the company in the month of February this year.
The company started its operations in India in 2014 and started remitting the money in 2015. It has so far remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities, which include one Xiaomi group entity, in the guise of royalty, the probe agency said.
Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities, ED said. The amount remitted to the other two US-based unrelated entities was also reportedly for the ultimate benefit of the Xiaomi group entities.
Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI. It procures the completely manufactured mobile sets and other products from the manufacturers in India. It has not availed any service from the three foreign-based entities to whom such amounts have been transferred, according to the ED.
Under the cover of various unrelated documentary facades created amongst the group entities, the company remitted this amount in the guise of royalty abroad which constitutes a violation of Section 4 of the FEMA. The company also provided misleading information to the banks while remitting the money abroad, ED said.
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