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Tuesday, January 31, 2023

Xiaomi Assets Valuing Rs 5,551 Crore Seized By ED Over Alleged Forex Norm Violation

Xiaomi the popular smartphone manufacturer across the globe seems to be in trouble as the Enforcement Directorate has seized the company’s assets worth Rs 5,551 crore. Yes! You read it correctly, the assets are seized from the Bangalore-based Xiaomi Technology India for “illegal outward remittances”. It seems that the company has beached the norms of Forex.

The ED has already begun the investigation regarding the “illegal outward remittances” by Xiaomi India in February. According to the investigating agency, the company has remitted foreign currency worth Rs 5,551.27 crore.

“Such huge amounts in the name of royalties were remitted on the instructions of the Chinese parent group. The amount remitted to two other US-based unrelated entities was also for the ultimate benefit of the Xiaomi group entities,” the ED stated in a statement.
Furthermore, the agency also claims that the company has shared misleading information with the banks while remitting the funds.

“We have studied the order from government authorities carefully. 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. Xiaomi is committed to working closely with government authorities to address any misunderstandings,” a Xiaomi spokesperson told TOI.

Let’s see how the company will handle the legal actions and what is going to happen next. Xiaomi is one of the leading smartphone companies in India with a wide range of products across all segments and categories.

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