85 breached
The Indian rupee has breached the significant psychological barrier of 85 against the US dollar, marking an all-time low amid a confluence of domestic and global pressures.
The Enforcement Directorate (ED) on Friday said that the Adjudicating Authority has issued showcause notices to Xiaomi Technology India Private Limited, its officials and three banks under the relevant provision of the Foreign Exchange Management Act (FEMA) on the basis of a complaint filed by the probe agency in connection with illegal remittances made by the company to the tune of Rs 5,551.27 crore.
“The showcause notices have been issued to the company along with Manu Kumar Jain, ex-Managing Director, and Sameer B. Rao, the current Director and Chief Financial Officer of the company. The Adjudicating Authority has also issued show cause notices to three banks, CITI bank, HSBC Bank and Deutsche bank AG for contravention of Section 10(4) and 10(5) of FEMA and directions issued by RBI by allowing foreign outward remittances in the name of royalty through the banks without conducting due diligence and without obtaining any underlying Technical Collaboration Agreement from the company,” said the ED.
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The ED had earlier frozen Rs 5,551.27 crore of Xiaomi Technology India Private Limited lying in its bank accounts under the provisions of the Foreign Exchange Management Act for unauthorised remittance of this amount in the guise of royalties abroad by the company.
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“The competent authority also observed that payment of royalties is nothing but a tool to transfer foreign exchange out of India and the same is in blatant violation of provisions of FEMA,” the official said.
The ED initiated a PMLA investigation in connection with the illegal remittances made by the company last year.
During investigation, it was found by the ED that the company remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi group entity in the guise of royalty, in violation of Section 4 of the FEMA.
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