ED arrests Xiaomi CFO, former MD in Rs 5,551 crore foreign exchange violation case
Enforcement Directorate Notice: A big growth has unfolded because the Enforcement Directorate (ED) just lately charged on Xiaomi, a outstanding Chinese cell phone producer. Alongside the corporate, the ED additionally issued show cause notice to Chief Financial Officer (CFO), Sameer B Rao, in addition to the former Managing Director (MD), Manu Kumar Jain. This transfer comes in mild of a foreign trade legislation violation case, involving a staggering quantity of over Rs 5,551 crore. Not stopping there, the ED has additionally issued show cause notices to three foreign banks, heightening the depth of the scenario.
Taking motion underneath the suitable part of the Foreign Exchange Management Act (FEMA), the Financial Investigation Agency has come forth with this important info. In their assertion launched on Friday, they highlighted that the Adjudicating Authority of FEMA has initiated motion by dispatching notices underneath Section 16 of the act. The recipients of those notices embrace Xiaomi Technology India Private Limited, two of its officers, Citibank, HSBC Bank, and Deutsche Bank AG.
This current growth builds upon a big step beforehand taken by the ED. In the wake of concluding the investigation of a FEMA case, a show cause notice is usually issued. The recipient of this notice might face the consequence of paying a advantageous up to thrice the quantity of the contravention. Alongside Xiaomi, Jain and Rao have additionally obtained this notice. It’s price noting that the ED had beforehand frozen Rs 5,551.27 crore held in the financial institution accounts of Xiaomi Technology India Pvt Ltd due to their involvement in illicit remittances.
Moreover, the ED has prolonged its attain to three foreign banks, together with Xiaomi, by serving them with notices. The main goal is to search clarification relating to an quantity totaling Rs 5,551 crore, allegedly linked to foreign trade violations. This newest transfer by the Enforcement Directorate has created fairly a stir in the trade.
Expanding on the matter, the Enforcement Directorate has shed additional mild on the scenario. It has come to their consideration that Xiaomi India has been transferring funds to its mum or dad firm since 2015. Remarkably, in the course of the course of the investigation, it was revealed that Xiaomi India commenced these remittances merely a 12 months after commencing operations in India in 2014. This revelation provides a layer of complexity to the case and raises pertinent questions concerning the firm’s monetary practices.
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