ED seizes deposits worth Rs 5,000 crore from Chinese company 'Xiaomi' -

New Delhi: The Enforcement Directorate (ED) seized deposits in the bank accounts of the leading Chinese mobile handset manufacturer Xiaomi. Xiaomi India has illegally siphoned funds out of India in the last few years. An official from the ED said that the deposits were seized as this is a violation of the Foreign Exchange Management Act (FEMA).

Xiaomi, which has a 24% share in the Indian mobile handset market, has violated the Indian law FEMA. It has illegally siphoned huge amounts of funds evading taxes. The inquiry into the malpractices of Xiaomi India, a subsidiary of Xiaomi, has been held for the last few months. ED has raided the company twice in the past. Also, the company’s former chief had been summoned a few days ago.

Xiaomi India started production in India in 2014. The next year, the company started remitting money under the guise of royalty to three companies abroad. The amount remitted is not very small and is to the tune of ₹55.51 billion. More importantly, no services have been availed by Xiaomi India from the companies that Xiaomi has remitted the money to. Xiaomi India remitted this money after receiving instructions from the parent company Xiaomi. One of these companies is linked to Xiaomi itself. Whereas, the other two companies are from the United States. There is no explanation for why the money was remitted to these companies. But this money is the unaccounted income of the company.