India Enforcement Directorate has recently ordered a lawsuit against Xiaomi Technology India Private Limited. This case concerned a $6.7 million violation of the Foreign Exchange Management Act. This issue goes back to 2022, when the Indian government seized the equivalent of $6.7 million from Xiaomi India’s bank accounts due to illegal capital outflow. A warrant is a type of court order that requires one or more parties to prove or disprove something to the court. It seems that Xiaomi’s problems with India Government will continue for a while.
Xiaomi’s issues with the India Enforcement Directorate are endless
According to a statement from the official Twitter account of India Enforcement Directorate, India’s Enforcement Directorate just issued a show cause order to Xiaomi Technology India Ltd and three foreign banks – Citi bank, HSBC Bank and Deutsche Bank AG. This isn’t the first time Xiaomi has had issues with India Government, and it won’t be the last at this rate. Problem goes back to 2022, when the Indian government seized the equivalent of $6.7 million from Xiaomi India’s bank accounts due to illegal capital outflow. After ED conducted an investigation, it was concluded that Xiaomi India transferred foreign currency abroad and held it there on behalf of the group entity. This is a direct violation of section 4 of FEMA, 1999.
Main breach is from Xiaomi, but the banks listed above also took their orders because they had a role in the breach. According to the ED, banks have allowed foreign remittances without any Technical Cooperation Agreement, so they’re included in this case. There will be developments about the case in the coming days, we will convey it to you. So what do you think about Xiaomi’s endless problems with India Government, do you think they will come to an agreement one day? Stay tuned for more and don’t forget to leave your comments below.
