ED seizes Rs. 5,551 cr worth of deposits of Xiaomi India
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The Enforcement Directorate (ED) has seized over Rs. 5,551 crores worth of deposits of Xiaomi India under the Foreign Exchange Management Act (FEMA). It is the highest amount frozen in the country to date.
The order of seizure was issued on April 29 and was sent for the approval of the competent authority. The order has been issued under section 37A of the FEMA.
The central agency tweeted: "The Competent Authority appointed under FEMA has confirmed the seizure order of Rs. 5551.27 Crore dated 29.04.2022 passed by the ED against Xiaomi Technology India Private Limited under the provisions of FEMA."
The agency told PTI that the authority while confirming the seizure of Rs. 5,551.27 crores, held that ED is right in holding that foreign exchange equivalent to Rs. 5,551.27 crores has been transferred out of India by Xiaomi India in an unauthorised manner and is held outside India on behalf of the group entity in contravention of Section 4 of the FEMA.
It was also observed that the payment of royalty is nothing but a tool to transfer the foreign exchange out of India and the same is in "blatant violation" of the provisions of FEMA.
Xiaomi received three show cause notices in August with an approximate duty liability of about Rs. 653 crores. It had only deposited Rs 46 lakh.