NO! Xiaomi is not moving India operations to Pakistan - Check what company said
The competent authority appointed under Section 37A of the Foreign Exchange Management Act (FEMA) on September 30th confirmed the seizure order of Rs 5,551.27 crore passed against Chinese phone maker Xiaomi India Private Limited by the Enforcement Directorate (ED), an ED official said.
Chinese technology company Xiaomi has rejected speculations over moving its operations from India to Pakistan amid a crackdown by the Enforcement Directorate. Earlier this year, Indian government had seized Xiaomi's assets worth Rs 5,551.27 crore for allegedly violating Foreign Exchange Management Act (FEMA) rules.
Responding to a Twitter post by South China Index, which claimed that "... Xiaomi may move its operations from India to Pakistan after Indian government freezes its assets worth $676 million", Xiaomi India replied on the post: "Xiaomi entered India in 2014 & in less than a year, we embarked on our Make in India journey. 99% of our smartphones & 100% of our TVs are made in India," it added.
The competent authority appointed under Section 37A of the Foreign Exchange Management Act (FEMA) on September 30th confirmed the seizure order of Rs 5,551.27 crore passed against Chinese phone maker Xiaomi India Private Limited by the Enforcement Directorate (ED), an ED official said.
According to the ED, this is the highest amount of seizure order in India which has been confirmed by the authority till date. The authority, while confirming the seizure order, held that foreign exchange equivalent to Rs 5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorised manner, which is held outside India on behalf of the group entity in contravention of Section 4 of the Foreign Exchange Management Act, and the same is liable to be seized in terms of the provisions of Section 37A of FEMA.
The competent authority also observed that payment of royalty is nothing but a tool to transfer foreign exchange out of India and the same is in blatant violation of the provisions of FEMA. Earlier, the ED had seized Rs 5,551.27 crore of Xiaomi India lying in its bank accounts under the provisions of FEMA.
The company unauthorisedly remitted this amount abroad under the guise of royalty, which is in violation of Section 4 of FEMA. Xiaomi India also filed a writ petition in the Karnataka High Court against the said order, which was dismissed by the court.
(With IANS inputs)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.