New Delhi: In the Indian smartphone and smart TV market, Xiaomi has slowly entered the Indian market offline through the online market and is now one of the most popular brands in the country. The Enforcement Directorate (ED) has seized assets worth crores of rupees from Chinese company Xiaomi, which makes popular mobile phone brands like Redmi and Mi. The directorate is investigating allegations of violations of the Foreign Exchange Management Act (FEMA) against the company. Xiaomi entered India in the year 2014. After which it was in great demand in the market. However, over the last few days, the company has been in the spotlight not because of its phone or TV but because of its ‘M’ and ‘I’ games. In which M means money laundering and I means India.
Assets worth Rs 5,551 crore seized
ED slams Xiaomi India’s Rs. Assets worth Rs 5,551 crore have been seized. The company’s money was deposited in many different banks. The company is also accused of money laundering in addition to violating the FEMA. Xiaomi India started operating in India in 2014. It is a wholly owned subsidiary of China’s leading mobile company Xiaomi. Xiaomi India started sending money to its parent company in 2015. The company has raised a total of Rs. 5,551.27 crore were sent to foreign companies.
What is Xiaomi’s M&I game?
The ED said the company had sent Rs 5,551.27 crore to three different foreign companies. One of these companies is part of the Xiaomi Group. The money has been sent in the name of royalty. The other two companies to which the money was sent are from the United States. Xiaomi Group has received the last benefit of the money sent to these three companies. The company sent the amount in the name of royalty by forging several documents, in violation of Article 4 of FEMA. Article 4 of the FEMA deals with the holding of foreign exchange. The ED says that apart from this, the company also gave a lot of ‘misleading information’ to banks while sending money abroad.
Earlier, the ED had summoned Manu Kumar Jain, former head of Xiaomi India and Global VP, for questioning. The ED has been investigating the company’s operations in India since February. In February, the investigating agency sent a notice to the company seeking several documents.