Xiaomi assets in India worth 5551 crore confiscated by ED: everything we know so far

UPDATE: Xiaomi India has provided us with the statement below. The company attempted to clarify its position in a tweet attached below.

[Original story follows]

Rs 5,551 crore worth of Xiaomi India assets have been confiscated by the Enforcement Authority (ED), the department said on Saturday. The Department stated that it had seized the amount under the provisions of the Foreign Exchange Management Act 1999. The money was withdrawn from four accounts of the company. The lawsuit was launched against a Chinese smartphone company for “illegal overseas money transfers,”meaning the company was sending colossal amounts to its parent group in China. The department raided Xiaomi’s office in December and has since reportedly summoned executives from the company’s Indian branch. The company launched an investigation in early February this year.

Xiaomi is the leading smartphone company in India and is reported to have an annual turnover of Rs 34,000 crore in the country. ED stated that the Chinese firm was sending huge sums to its group companies in China. This amount was in his four bank accounts at HSBC, Citi Bank, IDBI and Deutsche Bank.

“A certain amount was also transferred to two other unrelated organizations in the United States,” the source added.

Xiaomi entered the Indian smartphone market in 2014 and is now the leading smartphone manufacturer in India. The company has been on the ED’s radar since December 2021, when its office was raided. The raid also took place at the offices of Oppo and Huawei, but the agency launched an investigation into Xiaomi after it found some irregularities in the company’s documentation.

“Xiaomi India has not provided these contract manufacturers with any technology materials or software related assistance. Interestingly, Xiaomi India has transferred money to three foreign organizations from which they have not received any services,” the ED authorities said in a statement.

It should be noted that Manu Kumar Jain, who was heading Xiaomi’s Indian branch at the time of the raid, has since been operating from Dubai and was reportedly called out by ED.