The Enforcement Directorate on Saturday seized Rs 5,551.27 crore from the bank accounts of mobile manufacturing company Xiaomi Technology India, the central agency said in a statement. Xiaomi India is wholly owned subsidiary of the China-based Xiaomi group.
The company has violated the provisions of Foreign Exchange Management Act, the Enforcement Directorate alleged.
The assets were seized under the Act after an investigation was launched against the company in connection with alleged “illegal remittances” sent abroad in February, reported PTI.
Xiaomi started its operations in India in 2014 and started remitting money from the next year, the Enforcement Directorate said.
“The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign based entities,” the central agency said in its statement.
The company allegedly remitted funds to one Xiaomi group entity, and two others that are based out of the United States but ultimately benefit the Chinese firm.
Xiaomi India procured completely manufactured mobile sets and other products from Indian producers but transferred an amount of Rs 5,551.27 crore to these three entities despite not availing itself of any of their services, the Enforcement Directorate alleged.
The agency also accused the company of providing “misleading information” to the banks while remitting the money.
Earlier in April, Enforcement Directorate officials had questioned the Xiaomi group Global Vice President Manu Kumar Jain, PTI reported.