ED seizes Rs 5,500 cr from Chinese firm Xiaomi, which donated Rs 10 cr to PM-CARES Fund amidst Ladakh clash
Xiaomi was among several Chinese companies which made substantial donations to controversial PM CARES Fund, set up by PM Narendra Modi, while tensions between China and India were high in 2020
Chinese mobile giant Xiaomi, which had donated Rs 10 crore to PM-CARES Fund in June, 2020, found itself under the scanner of the Enforcement Directorate (ED) which on Saturday seized assets worth Rs 5,551.27 crore belonging to Xiaomi Technology India Pvt Ltd – a wholly-owned subsidiary of the China-based group – under provisions of the Foreign Exchange Management Act, 1999.
Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI.
This amount of ₹5,551.27 crore, lying in the bank accounts of the company has been seized by the Enforcement Directorate, the ED said.
Broaching the issue, TMC’s Lok Sabha member Mahua Moitra took pot shots at Modi govt. “ED seizes Rs 5,500 crore assets from Chinese smartphone giant Xiaomi over Forex law violations. Same Xiaomi allowed to donate Rs 10 crore to the opaque PM CARES fund,” she tweeted.
The PM CARES Fund was established by PM Narendra Modi in March 2020 after the first wave of the Coronavirus pandemic hit India.
The PM is ex-officio chairman of the PM CARES Fund while the Defence Minister, Home Minister and Finance Minister are its ex-officio trustees.
National Herald had that a number of Chinese companies, including Xiaomi, had contributed to the Fund at a time when the Indian Army was facing Chinese incursion in Ladakh.
As per the ED, the company started its operations in India in 2014 and began remitting money from 2015.
Earlier this month, the ED had interrogated the global vice president of the group, Manu Kumar Jain.
“The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi group entity, in the guise of royalty,” the ED said, adding that such huge amounts in the name of royalties were remitted.
“Under the cover of various unrelated documentary facades created amongst the group entities, the company remitted this amount in guise of royalty abroad which constitutes violation of section 4 of the FEMA,” the agency said.