ED summons Xiaomi vice prez for FEMA violations

| | New Delhi
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ED summons Xiaomi vice prez for FEMA violations

Thursday, 14 April 2022 | PNS | New Delhi

The Enforcement Directorate (ED) has summoned the global vice president of Chinese smartphone company Xiaomi, Manu Kumar Jain, for questioning in a probe linked to alleged contravention of the foreign exchange law.

The ED is investigating the company and its executives under the provisions of the Foreign Exchange Management Act (FEMA) linked to foreign remittances worth crores of rupees made over the last few years, sources said.

The ED has asked Jain, the former India head of Xiaomi, to furnish a number of financial documents linked to the company by appearing in person or by sending it through an authorised representative. Documents related to Xiaomi's shareholding, source of funds, vendor contracts, and payments made to Indian management and sent abroad have been sought by the ED regional office located in Bengaluru from Jain, who supervised its operations in India till recently, they said. Commenting on the ED’s notice to Jain, a Xiaomi spokesperson said it is "a law abiding and responsible company"."We give paramount importance to the laws of the land. We are fully compliant with all the regulations and are confident of the same. We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information," the spokesperson said.

Proceedings under the FEMA are civil in nature and the final penalty, post adjudication, can be at least three times the amount contravened under the law.

 Premises of Xiaomi and a few other Chinese mobile manufacturing companies were raided across the country by the Income Tax Department in December last year on charges of tax evasion.

The government has also banned some smart phone applications owned by Xiaomi on security grounds. Xiaomi has emerged as a lead player in Indian smartphone market.  

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