Last Update: September 30, 2022, 19:33 IST
The ED on Friday said that the competent authority under the Foreign Exchange Management Act (FEMA) has cleared an order for confiscation of over Rs 5,551 crore of deposits of Chinese mobile phone maker Xiaomi, deposited so far in India. The highest amount.
The Enforcement Directorate (ED) had on April 29 issued the seizure order under FEMA and subsequently sent it for approval of the competent authority, as required under the law governing foreign exchange violations in the country.
An order has been issued against Xiaomi under Section 37A of FEMA technology India Pvt Ltd, the federal agency said in a statement. “This is the highest amount of seizure order in India that has been confirmed by the authority so far.
“The Authority while confirming the seizure of Rs 5,551.27 crore said that the ED is correct in holding that foreign exchange equivalent to Rs 5,551.27 crore has been unauthorizedly transferred out of India by Xiaomi India and held outside India Is. Group entity in contravention of Section 4 of FEMA,” the agency said.
The Competent Authority also observed that payment of royalty is nothing but a tool to move foreign exchange out of India and is a “gross violation” of the provisions of FEMA.
Xiaomi is a trader and distributor of mobile phones in the country under the brand name of MI and Xiaomi India is a wholly owned subsidiary of the China-based Xiaomi Group.