Xiaomi India claims ED order does not satisfy provisions of FEMA Act in court

New Delhi: Xiaomi India on Wednesday disputed before the Karnataka High Court the Enforcement Directorate’s order seizing its bank assets under powers of the Foreign Exchange Management Act (FEMA), saying the amount of Rs 5,551.27 crore is equivalent to the royalty payments made to Qualcomm and its parent group, over the years of its operations in the country, and not in the capacity of Xiaomi holding the money outside India.

Therefore, Xiaomi lawyers argued, the ED order does not satisfy the tenets of the FEMA, which is applicable only against individuals and companies parking their own money outside the country, and not for payments made to another company. The company also said that the ED never asked for a show cause before passing the attachment order, which goes against the provisions of the Act.