Xiaomi India received $ 725 million from its bank accounts seized by the Enforcement Directorate over the weekend. The state organization said the Chinese manufacturer’s Indian division remitted the equivalent of INR 55.5 billion to three overseas-based entities in violation of foreign exchange laws.
Manu Kumar Jain, Xiaomi’s global vice president
Management said the huge amounts of royalties were remitted (donated to other parties) by Xiaomi Technology India Private Limited on instructions from their Chinese parent company. It was done “for the maximum benefit of the Xiaomi group” in violation of Rule 4 of the 1999 Foreign Exchange Management Act. It states that “no person resident in India should […] transfer any foreign currency […] located outside of India.
Xiaomi India has posted a response, stating that all royalty payments and statements to the bank are legitimate and truthful. The royalty payments, mentioned by the state agency, were for licensed technologies and intellectual property used in the Indian version of Xiaomi products. He is also “committed to working closely with government authorities to clear up any misunderstandings.”
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