ED issues notice to top officials of Xiaomi India, 3 banks over illegal remittances of Rs 5,551 cr

The agency had seized Rs 5,551.27 crore worth of funds of Xiaomi Technology India Private Limited lying in its bank accounts under the FEMA for "unauthorised" remittance of this amount in the guise of royalty abroad.

Enforcement Directorate (ED) on Friday said that it has issued showcause notices to top officials of Chinese mobile manufacturer Xiaomi, including CFO Sameer Rao, former MD Manu Jain and three banks for alleged foreign exchange violation of Rs 5,551.27 crore.

"The Adjudicating Authority has issued SCN to Xiaomi Technology India Private Limited, its officials and 3 banks under FEMA on the basis of a complaint filed by the ED with respect to illegal remittances made by the company to the tune of Rs 5,551.27 crore," said ED in a statement.

Sources said notices were served to Xiaomi Technology India Private Limited, the two executives, CITI Bank, HSBC Bank and Deutsche Bank AG.

The agency had seized Rs 5,551.27 crore worth of funds of Xiaomi Technology India Private Limited lying in its bank accounts under the FEMA for "unauthorised" remittance of this amount in the guise of royalty abroad.

The Adjudicating Authority has issued SCN to Xiaomi Technology India Private Limited, its officials and 3 banks under FEMA on the basis of complaint filed by the ED with respect to illegal remittances made by the company to the tune of Rs.5551.27 Crore.

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— ED (@dir_ed) June 9, 2023

"The authority while confirming the seizure held that ED is right in holding that foreign exchange equivalent to Rs 5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorised manner and is held outside India on behalf of the group entity in contravention of section 4 of FEMA, 1999 and the same is liable to be seized in terms of provisions of Section 37A of the FEMA," it said.

Under FEMA, a show-cause notice is issued after the completion of the ED investigation and once it is settled, an accused is required to pay a penalty.

In April 2023, Karnataka High Court rejected the petition filed by Xiaomi India challenging an order passed by the Competent Authority appointed under the Foreign Exchange Management Act,1999 (FEMA).

(With inputs from PTI)