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May 3, 2022

ED attached assets of Xiaomi and Actress Jacqueline Fernandez

by CA Shivam Jaiswal in Compliance Law

ED attached assets of Xiaomi and Actress Jacqueline Fernandez

Directorate of Enforcement (ED) has seized Rs.5551.27 Crore of M/s Xiaomi Technology India Private Limited under the provisions of Foreign Exchange Management Act,1999. Xiaomi India is wholly owned subsidiary of China based Xiaomi group. This amount of Rs. 5551.27 Crore lying in the bank accounts of the company has been seized by the ED. ED had initiated investigation in connection with the illegal remittances made by the company in the month of February this year. The Company started its operations in India in the year 2014 and started remitting the money from the year 2015. The Company has remitted foreign currency equivalent to INR 5551.27 Crore to three foreign based entities which include one Xiaomi group entity in the guise of Royalty. Such huge amounts in the name of Royalties were remitted on the instructions of their Chinese parent group entities. The amount remitted to other two US based unrelated entities were also for the ultimate benefit of the Xiaomi group entities. The Xiaomi India is a trader and distributor of mobile phones in India under the brand name of MI. The Xiaomi India procures the completely manufactured mobile sets and other products from the manufacturers in India. The Xiaomi India has not availed any service from the three foreign based entities to whom such amounts have been transferred. Under the cover of various unrelated documentary façade created amongst the group entities, the company remitted this amount in guise of Royalty abroad which constitute violation of Section 4 of the FEMA. The Company also provided misleading information to the banks while remitting the money abroad.

Enforcement Directorate(ED) has provisionally attached assets amounting to Rs. 7.27 Crore including Fixed deposits worth Rs. 7.12 Crore of Jacqueline Fernandez under Prevention of Money Laundering Act (PMLA), 2002 in the case of Sukesh Chandrasekhar. Investigation by ED revealed that a person was contacting people spoofing calls to dupe them as the numbers reflecting on their phone were from Government officers and he claimed to be a Government officer offering to help people for a price. Adopting thus, modus operandi, said person contacted Aditi Singh w/o Shivinder Mohan Singh by impersonating himself as Union Home Secretary, Union Law Secretary, officer from Prime Minister Office and junior officials and extorted more than Rs. 200 Crore from her over a period of 1 year on the pretext of contribution to party funds. Investigation revealed that the said person was conman Sukesh Chandrasekhar who was running his illegal extortion business from Central Jail, Delhi in connivance with Jail officials. During investigation, searches were conducted under PMLA at various premises all over India and properties seized viz. Bungalow in Chennai, 26 Cars, Indian currency, valuables etc valued at Rs. 45 Crore appx. In this case, the accused Sukesh Chandrasekhar and 8 other persons including his wife Leena Maria Paul were arrested under PMLA and subsequently prosecution complaint has been filed before the Special PMLA Court, Patiala House Court against all 9 accused and cognizance has been taken by the Court. During investigation, it was revealed that Sukesh Chandrasekhar had given various gifts worth Rs. 5.71 Crore to Jacqueline Fernandez from the proceeds of crime generated by criminal activities including extortion. Sukesh Chandrasekhar had put Pinky Irani, his long time associate and co-accused in this case to deliver the said gifts to her. In addition to these gifts, Sukesh Chandrasekhar had also given funds to the tune of USD 172913 and AUD 26740 to the close family members of Jacqueline Fernandez out of the proceeds of crime through co-accused Avtar Singh Kochhar, an established and well known international hawala operator. Sukesh Chandrasekhar had also delivered cash to the tune of Rs. 15 Lacs to a script writer on behalf of Ms. Jacqueline Fernandez as advance for writing a script of her webseries project. This cash amount has also been attached. Investigation with regards to tracing the remaining Proceeds of Crime is in progress.

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