New Delhi: Price range price over Rs 5,551 crore of Chinese language cell production corporate Xiaomi India were “seized” for violating the Indian foreign currency regulation, the Enforcement Directorate stated on Saturday.

The motion has been taken in opposition to Xiaomi Generation India Non-public Restricted. The corporate (also known as Xiaomi India) is a dealer and distributor of cellphones within the nation below the emblem title of MI.

 

“Xiaomi India is wholly owned subsidiary of China-based Xiaomi workforce. This quantity of Rs 5,551.27 crore mendacity within the financial institution accounts of the corporate has been seized via the Enforcement Directorate,” the company stated in a observation.

The seizure of price range has been performed below related sections of the International Alternate Control Act (FEMA) after a probe was once introduced via the federal company in opposition to the corporate in reference to alleged “unlawful remittances” despatched out of the country via the Chinese language company in February.

Xiaomi began its operations in India in 2014 and began remitting the cash from the following yr, it stated.

 

“The corporate has remitted foreign currency echange similar to Rs 5,551.27 crore to 3 overseas founded entities which come with one Xiaomi workforce entity, within the guise of royalty,” the ED stated.

Such massive quantities within the title of royalties had been remitted at the directions in their Chinese language “mother or father workforce” entities, it alleged.

“The quantity remitted to different two US-based unrelated entities had been additionally for without equal good thing about the Xiaomi workforce entities,” the ED stated.

It stated whilst Xiaomi India procures totally manufactured cell units and different merchandise from the producers in India it has no longer availed any carrier from those 3 overseas founded entities to whom such quantities were transferred.

 

“Below the duvet of quite a lot of unrelated documentary facade created among the gang entities, the corporate remitted this quantity in guise of royalty out of the country which represent violation of segment 4 of the FEMA,” it stated.

The stated segment of the civil regulation of FEMA talks about “protecting of foreign currency.”

The ED additionally accused the corporate of offering “deceptive data” to the banks whilst remitting the cash out of the country.

Previous this month, the ED had additionally wondered the worldwide vp of the gang, Manu Kumar Jain, on the company’s regional administrative center in Bengaluru, Karnataka.

 

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