ED Seizes Xiaomi's Assets Worth Rs 5,551 Crore Over Forex Violations

New Delhi: The Enforcement Directorate (ED) has seized Rs 5,551.27 crore belonging to Xiaomi Technology India Pvt Ltd for violating foreign exchange law.

The action has been taken under the provisions of the Foreign Exchange Management Act of 1999. The probe agency said the money was in the bank accounts of the Chinese smartphone giant and has been seized.

However, the company has claimed that all its operations "are firmly compliant" with local laws and regulations.

According to a report by Reuters, earlier this month, the agency had called a former Indian head of Xiaomi Corporation under investigation to determine whether the company's business practices were in line with Indian foreign exchange laws.

The ED has been probing the company for more than two months. In this regard, the agency had asked former India Managing Director Manu Kumar Jain to appear for questioning. However, neither Jain nor the agency has commented on this.

Xiaomi told Reuters that the company complies with all Indian laws and is "fully compliant".

"We are cooperating with the authorities in their ongoing investigation to ensure they have all the necessary information," Xiaomi said.

The report also claimed that the ED is probing existing business structures between Xiaomi India, the contract manufacturers, and the parent entity in China.

''The fund flow, including royalty payments, between Xiaomi India and its parent unit, was being probed,'' Reuters quoted a source as saying.

Notably, Xiaomi has a share of 24% in the Indian smartphone market. Along with this, Xiaomi is also the best selling smartphone in India in the year 2021.

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