Xiaomi India CFO Sameer Rao, former MD Manu Jain and three banks are said to have received show-cause notice from the Enforcement Directorate (ED). According to an official, the ED has served show-cause notice for FEMA violation of over Rs. 5,551 crore.
The Enforcement Directorate (ED) on Friday confirmed in a tweet that it has issued show-cause notices to Chinese mobile manufacturer Xiaomi, its chief financial officer and director Sameer Rao, former MD Manu Jain and three foreign banks for alleged foreign exchange violation of more than Rs. 5,551 crore.
The Adjudicating Authority has issued SCN to Xiaomi Technology India Private Limited, its officials and 3 banks under FEMA on the basis of complaint filed by the ED with respect to illegal remittances made by the company to the tune of Rs.5551.27 Crore.
— ED (@dir_ed) June 9, 2023
The adjudicating authority under the Foreign Exchange Management Act has issued show-cause notices to Xiaomi Technology India Private Limited, the two executives, CITI Bank, HSBC Bank and Deutsche Bank AG, the agency said in a statement.
The federal probe agency had seized Rs. 5,551.27 crore worth of funds of Xiaomi Technology India Private Limited lying in its bank accounts under the FEMA for “unauthorised” remittance of this amount in guise of royalty abroad.
“The competent authority, appointed under Section 37A of the FEMA, has confirmed the said seizure order.
“The authority while confirming the seizure held that ED is right in holding that foreign exchange equivalent to Rs. 5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorised manner and is held outside India on behalf of the group entity in contravention of section 4 of FEMA, 1999 and the same is liable to be seized in terms of provisions of Section 37A of the FEMA,” it said.
Under the FEMA, a show-cause notice is issued after the completion of the ED investigation and once it is settled, an accused is required to pay penalty.
