Shock for Chinese company Xiaomi, Rs 5,551 crores deposited in bank accounts will be confiscated

New Delhi: The Competent Authority constituted under the Foreign Exchange Management Act (FEMA) has approved the order to seize Rs 5,551 crore deposited in the bank accounts of Chinese smartphone maker Xiaomi. This is the largest seizure ever made in India. The Directorate of Enforcement provided information on Friday about this decision of the competent authority of FEMA. The ED (Enforcement Directorate) had on April 29 issued an order confiscating this Xiaomi bank deposit under the FEMA law.

Later, this order was sent for approval by the Authority. Authority approval is required under the FEMA Act which regulates matters relating to exchange violations.

ED said in a statement that an order under FEMA Section 37A has been issued against Xiaomi Technology India Pvt Ltd for the confiscation of its bank deposits. “This is the highest amount of confiscation ordered in India that has been approved by the Authority,” the ED said.

According to the ED, the authority found the action of the agency in the case of unauthorized transfer of foreign currency worth Rs 5,551.27 crore out of India by Xiaomi India. The authority also said that sending foreign currency out of the country in the name of paying royalties is a clear violation of FEMA law.

According to ED officials, the company started operations in India in 2014 and started sending money from 2015. The company made foreign exchange investments worth Rs 5551.27 crore in three foreign-based entities, including an entity of the Xiaomi group, under cover of royalties. Such a sum in the name of the royalty was sent on the orders of the group of Chinese entities of the company.

Source: navbharattimes.indiatimes.com

: Language entries

This message comes from newspapers, magazines and third-party websites. For more information, please check NewsDay Express Disclaimer.