ED raids Xiaomi India, seizes Rs 5,551 crore for FEMA violation

The Enforcement Directorate (ED) on Saturday raided Chinese mobile phone manufacturer Xiaomi for violating the foreign exchange laws and seized Rs. 5,551 crore.

Xiaomi India is a wholly-owned subsidiary of the China-based Xiaomi group. This amount of Rs 5,551.27 crore lying in the bank accounts of the company has been seized, the ED said in a statement.

In a press release after the ED's statement, Xiaomi Technology India said its operations in the country are "firmly compliant with local laws and regulations".

Notably, Xiaomi had donated Rs 10 crore to PM-CARES fund in 2020.

Broaching the issue, TMC Lok Sabha member Mahua Moitra took pot shots at the Modi government and said, “ED seizes Rs5,500 crore assets from Chinese smartphone giant Xiaomi over Forex law violations. Same Xiaomi allowed to donate Rs 10 crore to the opaque PM-CARES fund.”

The PM CARES fund was established by PM Modi in March 2020 after the first wave of the Coronavirus pandemic hit India.

Modi is chairman of the Fund while Defence Minister Rajnath Singh, Home Minister Amit Shah, Finance Minister Nirmala Sitharaman have been involved as the trustee of the PM CARES fund.

NH has reported that a number of Chinese companies have contributed to the Fund at a time when India army was facing Chinese incursion in Ladakh.

https://www.nationalheraldindia.com/india/pm-cares-fund-received-huge-donations-from-chinese-firms-just-ahead-of-conflict-at-lac

Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI.

As per the ED, the company started its operations in India in 2014 and began remitting the money from 2015.

Earlier this month, the ED had interrogated the global vice president of the group, Manu Kumar Jain also

“The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi group entity, in the guise of royalty,” the ED said adding that such huge amounts in the name of royalties were remitted.

“Under the cover of various unrelated documentary facades created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitute violation of section 4 of the FEMA,” the agency said.