Categories: Economy

ED seizes Rs 5,500 crore from Chinese smartphone giant Xiaomi over fake royalty payments

<p>
The Enforcement Directorate (ED) today seized over Rs 5,500 crore from the bank accounts of Chinese smartphone giant Xiaomi as the company has violated India’s foreign exchange law.</p>
<p>
The seizure has been made following an investigation carried out into "illegal remittances" under the guise of royalty made by the company in February this year, according to an ED statement.</p>
<p>
The company began its operations in India in 2014 and started remitting the money in 2015. It has so far illegally remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities, which include one Xiaomi group entity,  the Central investigative agency said.</p>
<p>
"Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities," the ED said. The amount remitted to the other two US-based unrelated entities was also reportedly for the ultimate benefit of the Xiaomi group entities.</p>
<p>
Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI. It procures completely manufactured mobile sets and other products from the manufacturers in India.</p>
<p>
"It has not availed any service from the three foreign-based entities to whom such amounts have been transferred in the guise of royalty," the ED said.</p>
<p>
The company has been found in breach of the foreign exchange management act (FEMA) which deals with the "holding of foreign exchange."</p>
<p>
The ED also accused the company of providing "misleading information" to the banks while remitting the money abroad.</p>

IN Bureau

Recent Posts

India, Malaysia to co-chair 14th ADMM-Plus Experts Working Group meeting on Counter-Terrorism in New Delhi

The 14th meeting of ASEAN Defence Ministers' Meeting-Plus (ADMM-Plus) Experts Working Group (EWG) on Counter-Terrorism…

6 hours ago

Rising cybercrime: 1.8 million women fall victim in Pakistan

Over the past five years, approximately 1.8 million women in Pakistan have fallen victim to…

1 day ago

Ashwini Vaishnaw acknowledges states’ role in making electronics India’s second-largest export

Union Minister Ashwini Vaishnaw on Saturday thanked the states for success of the electronic industry,…

1 day ago

US imposes visa restrictions on officials involved in ‘forced return’ of Uyghurs to China

The United States has announced a new visa restriction policy targeting foreign government officials involved…

1 day ago

ISIS leader killed in Iraq, Trump says “fugitive leader relentlessly hunted down”

The Iraqi Prime Minister said that personnel of the country's national intelligence service, working with…

1 day ago

SpaceX, NASA launch mission to bring back astronauts Sunita Williams, Butch Wilmore from ISS

SpaceX and NASA have launched a mission to bring back US astronauts Sunita Williams and…

1 day ago