Relief to Xiaomi, Karnataka High Court stays ED’s seizure of Rs 5,550 crore

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Xiaomi India has received some clemency from the Karnataka High Court in the ongoing probe under which the ED has attached assets worth over Rs 5,500 crore from the company. The court has stayed this. Xiaomi India will be able to use this fund on the condition that it is used only for day-to-day activities. The next hearing will be on May 12.

Last week, the ED had attached deposits worth Rs 5,551 crore from the company. The ED cited illegal remittances made by the company in the month of February this year. According to the ED’s allegations, Xiaomi started operations in India from 2014 and started sending money from 2015.

The ED claimed that the Chinese company had remitted foreign currency worth Rs 5551.27 crore to three foreign-based entities, including a Xiaomi group entity, under the guise of royalty. The ED further claimed that the remittances took place in the name of royalty and that the instructions for these actions came from a Chinese parent group. The ED said that the other two companies, which were US-based, were receiving the remittance amount, which ultimately benefited Xiaomi.

In response to the allegations, Xiaomi issued a statement saying, “We have carefully studied the orders of government officials. We assume that our royalty payments and details given to the bank are all valid and true. These royalty payments made by Xiaomi India were for the in-licensed technologies and IP used in our Indian variant products. It is a legitimate commercial arrangement for Xiaomi India to make such royalty payments. However, we remain committed to working closely with government officials to clear any misunderstandings.”

 

Xiaomi’s post comes as a relief as the Karnataka High Court stays the ED’s Rs 5,550 crore seizure, first appeared on BGR India.

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