Karnataka HC reserves verdict on Xiaomi plea against ED seizure of bank accounts in forex violation case

The Karnataka High Court Wednesday reserved its verdict in a plea filed by Xiaomi Technology India Private Limited against a move by the Enforcement Directorate (ED) for seizure of bank accounts of Xiaomi over alleged violation of the Foreign Exchange Management Act (FEMA) of 1999 to the tune of Rs 5,500 crore.

Xiaomi India approached the high court last month stating that the payment of Rs 5,500 crore to three foreign companies since 2016 did not contravene the FEMA law.

The ED has rejected claims by Xiaomi Technology India Private Limited, the Indian arm of the Chinese cell phone maker Xiaomi, that royalty payments to the tune of Rs 5,500 crore made by Xiaomi India to three foreign firms from the year 2016 had been found to be legal by the Income-Tax department in India.