UPDATE: Xiaomi India has provided us with a statement below. The company has tried to clarify its stand in a tweet attached below.
— Xiaomi India (@XiaomiIndia) April 30, 2022
[Original Story follows]
Xiaomi India’s assets worth Rs 5,551 crores have been seized by Enforcement Directorate (ED), the department said on Saturday. The department has said that it has seized the amount under the provisions of the Foreign Exchange Management Act, 1999. The money has been seized from four accounts of the company. The action has been taken against the Chinese smartphone company for “illegal outward remittances” which means that the company was sending a whopping amount to its parent group in China. The department had raided the office of Xiaomi in December and since then it has reportedly summoned the chief bodies of the company’s India branch. The company had instigated an investigation in February early this year.
ED has seized Rs.5551.27 Crore of M/s Xiaomi Technology India Private Limited lying in the bank accounts under the provisions of Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company.
— ED (@dir_ed) April 30, 2022
Xiaomi is the top smartphone company in India and reportedly has an annual turnover of Rs 34,000 crores in the country. ED has said the Chinese firm was sending a huge amount to its group companies in China. This amount was present in its four bank accounts at HSBC, Citi Bank, IDBI and Deutsche Bank.
“A certain amount has also been remitted to two more unrelated US-based entities”, a source added.
Xiaomi entered the Indian smartphone market in 2014 and now it is the top smartphone maker in India. The company was on the radar of ED since December 2021 when a raid took place at its office. The raid also took place at the office of Oppo and Huawei but the department started an investigation against Xiaomi after it found some irregularities in the company’s record.
“Xiaomi India has not provided any technological input or software-related assistance to these contract manufacturers. Interestingly, Xiaomi India has transferred money to the three foreign-based entities from which they have not availed any kind of service,” ED authorities said in a statement.
It should be noted that Manu Kumar Jain, who was leading the Indian branch of Xiaomi during the raid has been working from Dubai since then and has been reportedly summoned by ED. MySmartPrice has reached out to the company in order to provide us a statement, we shall update the article with the company’s statement when received.