Hindi NewsBusinessEnforcement Directorate Issues Show cause Notice To Xiaomi India Top Officials, 3 Banks For FEMA Violation Of ₹5,551 Crore
New Delhi6 minutes in the past
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The Enforcement Directorate (ED) has issued a show cause notice to Chinese mobile company Xiaomi on Friday (June 9). Apart from Xiaomi, the ED has also sent notices to the company’s Chief Financial Officer (CFO) Sameer Rao, former Managing Director Manu Jain and three foreign banks.
ED seeks account of ₹5,551 crore
The ED has issued this show cause notice regarding alleged foreign exchange violations of Rs 5,551 crore. The agency said it has issued show-cause notices under the Foreign Exchange Management Act (FEMA) to Xiaomi Technology India Pvt Ltd, two of its executives, Citibank, HSBC Bank and Deutsche Bank.
Xiaomi India started working in India from the year 2014. It is a wholly owned subsidiary of China’s leading smartphone company Xiaomi. ED had found in its investigation that Xiaomi India started sending money to its parent company from the year 2015. The company sent a total of Rs 5,551.27 crore to foreign companies.
ED seized money under FEMA provisions
After this, ED had seized about Rs 5,551.27 crore deposited in the accounts of Xiaomi India last year while taking action under the provisions of FEMA. This action was taken to illegally send money abroad in the name of royalty. Xiaomi India challenged this action of ED in the Karnataka High Court, but the High Court dismissed its petition.
According to experts, after the completion of the investigation under FEMA, a show cause notice is issued by the ED to the concerned companies. If the companies are not able to give any clear reason even in this notice, then they have to pay the fine as per the rules.
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