ED seizes Rs 5,551 cr deposits of smartphone giant Xiaomi India for FEMA violation
New Delhi (PTI): Funds worth over Rs 5,551 crore of Chinese mobile manufacturing company Xiaomi India have been "seized" for violating the Indian foreign exchange law, the Enforcement Directorate said on Saturday.
The action has been taken against Xiaomi Technology India Private Limited. The company (also called Xiaomi India) is a trader and distributor of mobile phones in the country under the brand name of MI.
"Xiaomi India is wholly owned subsidiary of China-based Xiaomi group. This amount of Rs 5,551.27 crore lying in the bank accounts of the company has been seized by the Enforcement Directorate," the agency said in a statement.
The seizure of funds has been done under relevant sections of the Foreign Exchange Management Act (FEMA) after a probe was launched by the federal agency against the company in connection with alleged "illegal remittances" sent abroad by the Chinese firm in February.
Xiaomi started its operations in India in 2014 and started remitting the money from the next year, it said.
"The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign based entities which include one Xiaomi group entity, in the guise of royalty," the ED said.
Such huge amounts in the name of royalties were remitted on the instructions of their Chinese "parent group" entities, it alleged.
"The amount remitted to other two US-based unrelated entities were also for the ultimate benefit of the Xiaomi group entities," the ED said.
It said while Xiaomi India procures completely manufactured mobile sets and other products from the manufacturers in India it has not availed any service from these three foreign based entities to whom such amounts have been transferred.
"Under the cover of various unrelated documentary facade created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitute violation of section 4 of the FEMA," it said.
The said section of the civil law of FEMA talks about "holding of foreign exchange."
The ED also accused the company of providing "misleading information" to the banks while remitting the money abroad.
Earlier this month, the ED had also questioned the global vice president of the group, Manu Kumar Jain, at the agency's regional office in Bengaluru, Karnataka.
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Congress using hijab issue to pacify minority anger, alleges Karnataka LoP R Ashoka
Bengaluru: Leader of Opposition in the Assembly R. Ashoka has accused the Congress government of using the hijab issue to placate what he described as discontent among minority voters after the Davanagere by-election.
In a post on X on Wednesday, Ashoka alleged that the state government, instead of addressing issues such as price rise, corruption, farmers’ distress and law and order, was attempting to retain its minority vote base by reviving the hijab issue.
Referring to the 2022 dress code introduced by the BJP government, which prohibited hijab in schools and colleges, Ashoka said the Karnataka High Court had upheld the policy and emphasised the importance of discipline in educational institutions.
He questioned the Congress government’s move to revisit the issue and asked whether setting aside the court-backed policy to benefit one community could be described as secularism.
Ashoka further alleged that while the government was willing to permit hijab, it continued to prohibit saffron shawls.
He accused the government of dividing students on religious lines rather than treating schools and colleges as spaces of equality.
Drawing a comparison with Mamata Banerjee’s government in West Bengal, Ashoka claimed that excessive appeasement politics had harmed the state and warned that the Congress in Karnataka could face a similar political response.
He said voters in Karnataka would teach the Congress a lesson for what he termed “vote-bank politics” and for compromising constitutional and judicial principles.
