FEMA authority slaps show- cause notices on Xiaomi, 3 foreign banks

The competent authority appointed under the Foreign Exchange Management Act (FEMA) has slapped show-cause notices on Xiaomi Technology India, its senior officials, and three foreign banks for alleged violations of forex rules.

The move follows the authority confirming a seizure order of Rs 5,551.27 crore, passed by the Enforcement Directorate (ED) against the Chinese phone maker in April last year under FEMA provisions, alleging that the company had been remitting money illegally to foreign entities under the guise of royalties.

The FEMA authority heard the case and decided in favour of the agency’s order seizing the smartphone maker’ assets and accordingly issued show-cause notices under various sections of forex laws, an official source said.