In a further setback for Chinese smartphone maker Xiaomi, the Enforcement Directorate (ED) announced on Friday (September 30) that the competent authority has confirmed the seizure of INR 5,551.27 Cr in funds in a Foreign Exchange Management Act (FEMA) probe.
In July of this year, the Karnataka High Court (HC) directed the competent authority (CA) to rule within 60 days on the veracity of the seizure of INR 5,551.27 Cr in Xiaomi’s bank accounts. This is the country’s highest seizure amount confirmed by the CA to date. The CA also stated that Xiaomi’s royalty payments were “nothing more than a tool” for transferring foreign exchange out of the country. Since the beginning of the year, Xiaomi has been mired in regulatory issues. Over compliance issues ranging from customs duties to foreign exchange, the company has been targeted by agencies such as the Income Tax Department, the Directorate of Revenue Intelligence (DRI), and the Enforcement Directorate (ED).