Xiaomi Assets Worth Over Rs 5,551 Crore Seized in India
In an official tweet today, the Enforcement Directorate confirmed that it has seized a whopping Rs 5,551 crore sum from Xiaomi’s bank accounts. This move comes after an investigation was launched into the Chinese giant’s practices back in February. The federal agency started the probe in regards to alleged illegal remittances to a foreign entity. ED has seized Rs.5551.27 Crore of M/s Xiaomi Technology India Private Limited lying in the bank accounts under the provisions of Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company.— ED (@dir_ed) April 30, 2022
In an official statement to PTI, the ED revealed that Xiaomi’s Indian arm started remitting the money to foreign accounts merely a year after starting its operations back in 2014. Huge sums were transferred to the company’s parent, as well as two other US-based entities, in the name of royalties, alleged the ED.
The sum transferred over these years totals Rs 5,551 crore (when converted from foreign currency) and was “for the ultimate benefit of the Xiaomi group entities,” as per the agency. The company is said to not have conducted any business with these foreign entities, misleading banks and remitting the money abroad in the name of royalties. Therefore, Xiaomi India has been charged under the relevant sections of the FEMA law.
We await an official statement from Xiaomi on this situation, so stay tuned for more information. Until then, tell us what you think about this alleged illegal money remittance? Share your thoughts in the comments below.
We have studied the order from government authorities carefully. We believe our royalty payments and statements to the bank are all legit and truthful. These royalty payments that Xiaomi India made were for the in-licensed technologies and IPs used in our Indian version products. It is a legitimate commercial arrangement for Xiaomi India to make such royalty payments. However, we are committed to working closely with government authorities to clarify any misunderstandings.”
