Telset.id, Jakarta – Xiaomi is facing a very serious problem in India as the company is violating FEMA regulations in the country due to illegal money transfers.

The information about Xiaomi violating FEMA regulations comes directly from a Twitter tweet on the official account of the Indian Government’s Enforcement Directorate, this tweet also explains the issue.

In the tweet, India’s Law Enforcement Directorate issued an order to Xiaomi Technology India Ltd, along with three foreign banks operating in the country. According to the GSMArena report, the banks are Citi Bank, HSBC Bank and Deutsche Bank AG.

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This order aims to force companies to reveal the cause of this problem. This order is a type of court order that requires one or more parties to prove or disprove something in court.

In this case, the companies faced violations of the Foreign Exchange Management Act totaling $676 million or IDR 10 trillion.

The contracting authority has issued an SCN to Xiaomi Technology India Private Limited, its officials and 3 banks under FEMA on the basis of a complaint filed by the ED regarding illegal remittances made by the company in the amount of Rs.5551.27 Crore.

—ED (@dir_ed) June 9, 2023

Basically, this violation of the law was actually committed by Xiaomi, but the banks listed in the order accepted the order, because they have a war in the act of violation.

According to India’s Law Enforcement Directorate, the three banks allowed the Chinese tech giant to send remittances abroad without being bound by a technical cooperation agreement.

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This lawlessness problem started a year ago, in 2022, the Indian government confiscated about $6.7 million or IDR 99.6 billion from Xiaomi India’s bank account due to illegal capital outflows.

After the authorities conducted an investigation, it was concluded that Xiaomi India transferred currency and held it there on behalf of group entities. This is a direct violation of Section 4 of FEMA, 1999.