The Enforcement Directorate (ED) has issued a show-cause notice to Xiaomi Technology India, Chief Financial Officer (CFO) Sameer Rao, former Managing Director Manu Jain, and three banks for FEMA violation of Rs 5,551 crore, reported PTI quoting officials.
The notice has been issued regarding illegal remittances made by the company of around Rs 5551.27 Crore, as per the report.
According to PTI, the ED has issued show-cause notices under Foreign Exchange Management Act to Xiaomi Technology India Private Limited, the two executives, CITI Bank, HSBC Bank, and Deutsche Bank AG.
''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.
A show-cause notice is issued after the completion of a FEMA investigation and once its concluded, the accused may have to pay a penalty that could be three times the amount of contravened, reported PTI.
ED seized funds of Rs 5,551.27 Crore held by Xiaomi Technology India Private Limited in its bank accounts. The action was taked due to the unauthorized transfer of this amount disguised a royalty payments to overseas entity.