The Central government and the Enforcement Directorate (ED) have appealed to the Karnataka High Court to seize ₹5,551.27 crore from Xiaomi’s bank accounts. They argue that while the Court upheld the ED’s seizure order, it failed to ensure that Xiaomi retained the disputed funds in its accounts.
In a recent judgment, a single judge of the High Court dismissed Xiaomi’s petition challenging the ED’s seizure order. However, the appellants note that the judge did not rule on the ED’s interlocutory application, which sought to ensure that Xiaomi maintained the disputed funds in its bank accounts.
According to the appellants, Xiaomi has spent approximately 30% of the ₹5,551.27 crore amount that is subject to seizure. As of April 2022, Xiaomi was reported to have around ₹7,000 crore in its bank account. However, between May and October 2022, the company allegedly spent around ₹1,594.48 crore, leaving approximately ₹4,241 crore in its accounts.
The appellants also argue that the judge made an error in ruling Xiaomi’s petition challenging the account seizure as admissible. While Justice M Nagaprasanna deemed the petition admissible in April 2023, he ultimately rejected Xiaomi’s challenge to Section 37 of the Foreign Exchange Management Act (FEMA). The judge’s order also addressed other pending applications, including the interlocutory application filed by the Central government and the ED.
The appellants contend that the judge should have ordered Xiaomi to return the funds it used to cover the shortfall in the ₹5,551.27 crore subject to ED seizure.
