Karnataka court on Friday rejected China-based Xiaomi Corp's petition challenging the seizure of assets worth Rs 5,551 crore by the Enforcement Directorate.
The court though observed that the company's challenge is maintainable but it also dismissed it on the same merit. However, the court upheld the validity of section 37A of the Foreign Exchange Management Act stating that the section does not suffer from manifest arbitrariness.
The court has granted the company an option to appeal under 37A(5) of the act.
ED seizes Xiaomi's assets
The Enforcement Directorate last year has seized Rs 5,551 crore assets of Xiaomi assets, alleging that the company has made illegal remittances to foreign entities including Xiaomi Group and two other US-based firms in form of royalty payments. It was last week when the appellate body confirmed the seizure of assets.
According to the law that regulates foreign exchange violations in the country, ED issued the order for seizure of these bank deposits under FEMA and later pushed it for approval of the competent authority.
The company since the day of seizure has denied any wrongdoings.
