Karnataka High Court has rejected Chinese mobile phone manufacturer Xiaomi Corp’s petition challenging the seizure of Rs 5,551-crore ($676.35 million) by the Enforcement Directorate.
Last year, ED froze Xiaomi’s assets, alleging the company had made illegal remittances to foreign entities by passing them off as royalty payments. The company denied any wrongdoing.
The competent authority under the Foreign Exchange Management Act (FEMA) has approved an order of seizure of over Rs 5,551 crore worth of deposits of Xiaomi, the highest amount frozen till date in India, ED said last year.
The agency charged the popular Chinese phone maker with remitting foreign currency equivalent to Rs 5,551.27 crore to three entities — one Xiaomi Group company and two US-based unrelated entities — in the guise of royalty.
ED had first issued the order of seizure of these bank deposits on April 29, 2022 under the FEMA and later sent it for approval of the competent authority, as required under the law that regulates foreign exchange violations in the country.
