After Vivo, Xiaomi faces ED heat; approaches Karnataka HC to be sent back

Chinese mobile phone manufacturer Xiaomi’s India branch has been directed to approach the ‘competent authority’ in connection with the Enforcement Directorate’s seizure of ₹5,551.27 crore from its bank accounts and the company’s attempts to secure a reprieve from the courts.

Xiaomi had approached the court after the ED froze its bank accounts alleging violation of Section 4 of the Foreign Exchange Management Act, or FEMA. The ED alleged Xiaomi had illegally transferred money outside India in the guise of royalty payments.

In response to the Chinese company’s plea, on July 5, Karnataka high court Justice SG Pandit pointed out that a resolution mechanism existed within FEMA itself. “The authorised officer (in this case ED), after passing seizure order, is required to place seizure order with entire/relevant material before competent authority within 30 days from date of such seizure,” the court ruled.