The Enforcement Directorate (ED) on Saturday said it has seized Rs 5,551.27 crore from Xiaomi India, a local subsidiary of the Chinese gadget company, under the provisions of Foreign Exchange Management Act (FEMA), 1999.
The seizure was made from the company’s bank accounts over violations of the Indian foreign exchange law. Xiaomi India sells mobile phones in the country under the brand name MI.
The central probe agency had initiated an investigation in connection with “illegal outward remittances made by the company” in February 2022.
Xiaomi started its operations in India in 2014 and according to the Enforcement Directorate and started remitting the money from 2015.
“The company has remitted foreign currency equivalent to Rs 5551.27 crore to three foreign based entities which include one Xiaomi group entity in the guise of royalty.” the ED has alleged in the statement, adding, “Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities.”
The amount remitted to “other two US-based unrelated entities” was also for the “ultimate benefit of the Xiaomi group entities,” the probe agency added.