ED issues show-cause notice to Xiaomi India top officials, 3 banks for FEMA violation of ₹5,551 crore
1 min read 09 Jun 2023, 08:11 PM ISTED issued show-cause notices to Xiaomi India CFO Sameer Rao and its former MD Manu Jain for FEMA violations
PremiumThe Enforcement Directorate issued a show-cause notice to Xiaomi Technology India, CFO Sameer Rao, its former MD Manu Jain, and 3 banks for FEMA violation of ₹5,551 crore, news agency PTI said quoting officials on Friday. The officials said that the notice has been issued with respect to illegal remittances made by the company to the tune of ₹5551.27 crores.
The authority, while confirming the seizure, held that ED is right in holding that foreign exchange equivalent to INR 5551.27 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 the Foreign Exchange Management Act, 1999 and the same is liable to be seized in terms of provisions of Section 37A of the FEMA, the statement further said.
"The competent authority, appointed under Section 37A of the FEMA, has confirmed the said seizure order.
"The authority while confirming the seizure held that ED is right in holding that foreign exchange equivalent to ₹5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorized 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.
ED seized funds amounting to ₹5,551.27 crore belonging to Xiaomi Technology India Private Limited, which were held in its bank accounts. This action was carried out under the Foreign Exchange Management Act (FEMA) due to the unauthorized transfer of this sum disguised as royalty payments to overseas entities.
Under the Foreign Exchange Management Act (FEMA), the federal probe agency issues a show-cause notice after its investigation into the alleged irregularities, and once it is settled the concerned companies are required to pay the penalties as per the rules.
(With agency inputs)
