The Central probe agency has directed Kannan to submit financial documents, including those of his relatives before 5 October.
For a FEMA violation of $5,551 crore, the Enforcement Directorate issued a show-cause notice to Xiaomi Technology India, CFO Sameer Rao, its former MD Manu Jain, and 3 banks. According to the officials, the notice relates to illegal remittances made by the company totaling $5,555.27 crores.
Manu Kumar Jain, a former MD, and Sameer B. Rao, a director and chief financial officer, have each received show-cause letters. The ED stated in a statement that notices have also been sent to CITI Bank, HSBC Bank, and Deutsche Bank AG for violating Sections 10(4) and 10(5) of FEMA by permitting international payments made under the guise of royalties without carrying out due diligence and obtaining any underlying Technical Collaboration Agreement from the company.
In line with FEMA regulations, the federal investigation agency seized $5,551.27 billion worth of property belonging to the “wholly-owned subsidiary of the China-based Xiaomi group” last year. According to the investigation agency, the funds were in bank accounts linked to the Chinese smartphone giant and had been confiscated in February in connection with alleged “illegal outward remittances.”
While confirming the seizure, “the authority held that ED is right in holding that foreign exchange equivalent to 5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorised manner and is held outside of India on behalf of the group entity in contravention of section 4 of FEMA, 1999 and that the same is liable to be seized in accordance with provisions of Section 37A of the FEMA,” it said.
After the ED investigation is over, a showcause notice is given under the FEMA, and once it is resolved, the accused is obligated to pay a fine.