On Saturday, April 30, as the Enforcement Directorate (ED) seized Rs 5,551.27 crore from Xiaomi Technology India Private Limited, the phone manufacturer issued a statement.
“As a brand committed to India, all our operations are firmly compliant with local laws and regulations,” said the Chinese manufacturer. An investigation was launched against Xiaomi & ED claimed that illegal remittances were sent abroad by the firm.
As per ED, Xiaomi was sending the money abroad since 2015. In response, Xiaomi said that the money sent abroad was just royalty payments & it is a legitimate commercial arrangement.
“We have studied the order from government authorities carefully. We believe our royalty payments and statements to the bank are all legit and truthful. These royalty payments that Xiaomi India made were for the in-licensed technologies and IPs used in our Indian version products. It is a legitimate commercial arrangement for Xiaomi India to make such royalty payments. However, we are committed to working closely with government authorities to clarify any misunderstandings,” Xiaomi further added in a statement.
ED has further claimed that Xiaomi has sent the money to three foreign-based entities with whom it has no trade relations. “Under the cover of various unrelated documentary facade created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitute violation of section 4 of the FEMA,” said the federal agency.