New Delhi: Xiaomi India<\/a> has filed a petition at the Karnataka High Court<\/a> against the competent authority's confirmation of the Enforcement Directorate<\/a>'s (ED) order to seize the company's bank assets worth over Rs 5,500 crore for allegedly violating Foreign Exchange Management Act<\/a> (FEMA<\/a>) provisions.
The case is listed for Thursday and will be heard by the vacation bench of Justice Sanjay Gowda, people familiar with the matter said.
Xiaomi<\/a> India<\/a> will be taking a two-pronged approach to appeal against the order, according to them.
The writ petition is the constitutional route wherein the company's lawyers will be arguing to put a stay on the ED’s order.
Additionally, Xiaomi India will also approach the appellate tribunal empowered under FEMA, challenging the competent authority's confirmation of the ED order.
India’s smartphone market leader didn’t respond to ET’s emailed queries.
In a major setback for Xiaomi, the competent authority last week held that the ED is right in holding foreign exchange equivalent to Rs 5,551.27 crore.
The ED had passed a seizure order in April against Xiaomi India for illegally remitting foreign exchange outside India under the guise of royalty payments.
The competent authority said Xiaomi India transferred the said amount in an unauthorised manner and is held on behalf of the group entity in contravention to Section 4 of FEMA.
It also observed that royalty payments are nothing but a tool to transfer foreign exchange out of India and are in blatant violation of FEMA provisions.
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