India seizes $726 mn from Chinese phone company Xiaomi on forex breach
India’s anti-money laundering agency said it seized 55.51 billion rupees ($726 million) from Chinese mobile company Xiaomi. for breaching the country’s foreign exchange laws.
India's anti-money laundering agency said it seized 55.51 billion rupees ($726 million) from a local unit of Chinese mobile company Xiaomi Corp. for breaching the country's foreign exchange laws.
The money was seized from the bank accounts of Xiaomi Technology India under the provisions of the Foreign Exchange Management Act, the Enforcement Directorate said in a Twitter post on Saturday. Xiaomi didn't immediately respond to a request for comment.
Xiaomi accounts for more than a fifth of India's smartphone market share by shipment volumes, making it the largest.
Working closely with govt to clarify 'misunderstandings', says Xiaomi as ED seizes ₹5,551 cr assets
(ANI): Reacting to the Enforcement Directorate (ED) crackdown and seizure of ₹5,551.27 crore assets in India, Chinese telecom firm Xiaomi on Saturday said it is committed to working closely with the government authorities to clarify any "misunderstandings".
"As a brand committed to India, all our operations are firmly compliant with local laws and regulations. We have studied the order from government authorities carefully," Xiaomi spokesperson said in a statement.
"We believe our royalty payments and statements to the bank are all legit and truthful. These royalty payments that Xiaomi India made were for the in-licensed technologies and IPs used in our Indian version products. It is a legitimate commercial arrangement for Xiaomi India to make such royalty payments," it said.
"However, we are committed to working closely with government authorities to clarify any misunderstandings," Xiaomi spokesperson added in the statement.
The company's statement came after the Enforcement Directorate (ED) said it has seized ₹5,551.27 crore of assets lying in the bank accounts of Xiaomi Technology India Pvt Ltd.
The ED's crackdown on Xiaomi is under the Foreign Exchange Management Act (FEMA) in connection with illegal remittances made by the firm in February this year.
According to the ED, the Company has remitted foreign currency equivalent to ₹5,551.27 crore to three foreign-based entities which include one Xiaomi group entity in the guise of Royalty.
"Such huge amounts in the name of Royalties were remitted on the instructions of their Chinese parent group entities. The amount remitted to other two US-based unrelated entities were also for the ultimate benefit of the Xiaomi group entities," the ED said.
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