The Enforcement Directorate on Saturday said it had seized ₹5,551.27 crore belonging to Xiaomi Technology India Pvt Ltd – a ‘wholly-owned subsidiary of China-based Xiaomi group’ – lying under provisions of the Foreign Exchange Management Act of 1999. The probe agency said the money was in bank accounts belonging to the Chinese smartphone giant and had been seized in connection with alleged ‘illegal outward remittances’ in February.
“Xiaomi India is a wholly-owned subsidiary of China-based Xiaomi group. This amount of ₹5,551.27 crore lying in the bank accounts of the company has been seized by the Enforcement Directorate,” the agency said in a statement.
“The company has remitted foreign currency equivalent to ₹5,551.27 crore to three foreign based entities, which include one Xiaomi group entity, in the guise of royalty,” the ED said. Such huge amounts in the name of royalties were remitted on instructions of Chinese “parent group” entities, the ED has alleged.
The ED has claimed Xiaomi India gets fully built mobile sets and other products from manufacturers in India, but had not availed any service from the three foreign-based entities to whom such amounts have been transferred.
