The Enforcement Directorate on Friday said that it has issued show cause notices to Chinese mobile manufacturer Xiaomi, its chief financial officer Sameer Rao, former MD Manu Jain, and three foreign banks under the FEMA act for violation of more than Rs.5,551 crore.
The federal probe agency had seized Rs.5551.27 crore worth of funds of Xiaomi Technology India Private Limited lying in its bank accounts under the FEMA for unauthorized remittance of this amount in the guise of royalty abroad. As per Times of India, “ The authority while confirming the seizure held that ED is right in holding that foreign exchange equivalent to Rs.5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorized manner and is held outside India on behalf of the group entity in contravention of Section 4 of FEMA,1999 and the same is liable to be seized in terms of provisions of Section 37A of the FEMA.”
It is said that to operate in India Xiaomi needs to pay Rs.16,653 crore also in terms of the amount involved, the ED order for confiscating Xiaomi Technology India’s bank accounts is the largest to date confirmed by the quasi-judicial authority under foreign exchange laws.
