The Enforcement Directorate (ED) has seized Rs 5,551.27 crore of smartphone giant Xiaomi India lying in their bank accounts under the provisions of the Foreign Exchange Management Act, 1999, in connection with the illegal outward remittances made by the company, the probe agency said in a press release.
Xiaomi India is a trader and distributor of mobile phones in the country under the brand name MI.
In February this year, the ED initiated an investigation over the alleged illegal remittances made by M/s Xiaomi Technology India Private Limited, a wholly-owned subsidiary of the China-based Xiaomi group.
The company started its operations in India in 2014 and started remitting the money in 2015. It has so far remitted foreign currency equivalent to ₹ 5,551.27 crores to three foreign-based entities, which include one Xiaomi group entity, in the guise of royalty, the probe agency said.
“Such huge amounts in the name of Royalties were remitted on the instructions of their Chinese parent group entities. The amount remitted to other two US-based unrelated entities were also for the ultimate benefit of the Xiaomi group entities,” the ED said.