Xiaomi India’s deposits worth Rs 5,551 crore seized for violating FEMA law

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Xiaomi may have enjoyed its limelight with the launch of the flagship Xiaomi 12 Pro and Xiaomi Pad 5 in India earlier this week. But today, the Enforcement Directorate has seized over Rs 5,551 crore from Xiaomi Technology India Pvt Ltd, the Indian arm of the Chinese phone maker, for violating the Foreign Exchange Management Act (FEMA) law. See full details below:

Xiaomi’s assets worth over Rs 5,551 crore seized in India

In an official tweet today, the Enforcement Directorate confirmed that it has seized an amount of Rs 5,551 crore from the bank accounts of Xiaomi. The move comes after an investigation into the practices of the Chinese giant began in February. The federal agency launched an investigation into alleged illegal remittances to a foreign entity.

In an official statement to PTI, the ED revealed that the Indian branch of Xiaomi Started sending money to foreign accounts just a year after starting its operations Back in 2014. The ED alleged that huge amounts were transferred in the name of royalty to the company’s parent as well as two other US-based entities.

According to the agency, the amount transferred over these years totaled Rs 5,551 crore (when converted from foreign currency) and “for the ultimate benefit of the entities of the Xiaomi Group”. The company is said to have done no business with these foreign entities, misled the banks and sent money abroad in the name of royalties. Hence, Xiaomi India has been charged under relevant sections of the FEMA law.

We are waiting for an official statement from Xiaomi on this situation, so stay tuned for more details. Until then, tell us what you think about this alleged illegal remittance? Share your thoughts in the comments below.

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