Xiaomi's ₹ 5,551 Crore Assets Seized Over Forex Violations: Probe Agency

The Enforcement Directorate (ED) has taken major action under the Foreign Exchange Management Act (FEMA) against Xiaomi Technology India Pvt Ltd, a wholly owned subsidiary of China-based Xiaomi Group. The ED has attached assets worth Rs 5551.27 crore of the company.

Action on illegal transactions

The central agency has taken this action in relation to illegal transactions done by the firm in February this year. The ED said on Saturday that the seized amount of Rs 5551.27 crore is lying in the bank accounts of Xiaomi Technology India Pvt Ltd. Who started his business in India in 2014 and started sending money from here in 2015.

Two companies from America also involved

According to the ED, the company has remitted foreign exchange equivalent to Rs 5551.27 crore to three foreign-based entities. In which a huge amount has also been sent to a Xiaomi group company under the guise of royalty. Under the guise of royalty, this amount was sent at the behest of their Chinese parent group institutions. It also includes two US companies.

Big business of mobile phone in the name of MI

The ED said that wherever this amount was sent, ultimately its ultimate benefit was to be the entities of the Xiaomi group. Xiaomi India is running a big business of mobile phones in India in the name of MI.

Big confusion in transaction

Xiaomi India buys complete set of mobile sets and related products from manufacturers in India. The ED said that Xiaomi India has sent huge amount to three foreign companies from whom Xiaomi India has not taken any service.

The company also misled the bank

The ED said that Xiaomi India prepared fake documents for the transaction of this amount and also lied to mislead the banks. While sending money abroad, Xiaomi India has violated the necessary rules, which is a violation of Section 4 of FEMA.