Xiaomi information: Funds value over Rs 5,551 crore of Chinese language cellular manufacturing firm Xiaomi India have been “seized” for violating the Indian international trade legislation, the Enforcement Directorate mentioned mentioned on Saturday.
The motion has been taken towards Xiaomi Expertise India Personal Restricted. The corporate (additionally referred to as Xiaomi India) is a dealer and distributor of cellphones within the nation beneath the model identify of MI.
“Xiaomi India is wholly owned subsidiary of China-based Xiaomi group. This quantity of Rs 5,551.27 crore mendacity within the financial institution accounts of the corporate has been seized by the Enforcement Directorate,” the company mentioned in a press release.
The seizure of funds has been completed beneath related sections of the Overseas Trade Administration Act (FEMA) after a probe was launched by the federal company towards the corporate in reference to alleged “unlawful remittances” despatched overseas by the Chinese language agency in February.
Xiaomi began its operations in India in 2014 and began remitting the cash from the following yr, it mentioned.
“The corporate has remitted international foreign money equal to Rs 5,551.27 crore to 3 international primarily based entities which embrace one Xiaomi group entity, within the guise of royalty,” the ED mentioned.
Such big quantities within the identify of royalties had been remitted on the directions of their Chinese language “mum or dad group” entities, it alleged.
“The quantity remitted to different two US-based unrelated entities had been additionally for the last word advantage of the Xiaomi group entities,” the ED mentioned.
It mentioned whereas Xiaomi India procures fully manufactured cellular units and different merchandise from the producers in India it has not availed any service from these three international primarily based entities to whom such quantities have been transferred.
“Underneath the quilt of assorted unrelated documentary facade created amongst the group entities, the corporate remitted this quantity in guise of royalty overseas which represent violation of part 4 of the FEMA,” it mentioned.
The mentioned part of the civil legislation of FEMA talks about “holding of international trade.”
The ED additionally accused the corporate of offering “deceptive data” to the banks whereas remitting the cash overseas.
Earlier this month, the ED had additionally questioned the worldwide vice chairman of the group, Manu Kumar Jain, on the company’s regional workplace in Bengaluru, Karnataka.