The Enforcement Directorate (ED) issued a show cause notice to top Xiaomi Technology India officials for FEMA violations of ₹5551 crore.
The Adjudicating Authority sent notices to Xiaomi Technology India CFO Sameer Rao, former MD Manu Jain, and three banks on the basis of complaint filed by the ED for illegal remittances to the tune of Rs.5551.27 crore.
ED claimed it was the highest ever seizure amount-related order confirmed till date. The ED probe had led to seizure of the amount lying in the bank accounts of Xiaomi Technology India for alleged remittance without any authorisation, in the guise of royalties abroad.
No respite from court
Earlier in April 2023, the Karnataka High Court had rejected the petition filed by Xiaomi India challenging an order passed by the Competent Authority appointed under the Foreign Exchange Management Act,1999 (FEMA).
Royalties termed illegal
The central financial crime agency had last month alleged that Xiaomi, which started operations in India in 2014, remitted foreign currency equivalent to ₹5,551.27 crore to three overseas entities that include one Xiaomi group entity in the guise of royalty. Xiaomi India had not availed of any service from the three entities to which the funds were transferred.
The company had refuted the ED charges saying its operations are compliant with local laws and regulations.
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