Dixon Tech tumbles after ED seizes Rs 5,500 cr of Xiaomi in FEMA case

2 May 2022 , 01:10 PM

Xiaomi India is wholly owned subsidiary of China based Xiaomi group and one of the prominent clients of Dixon Technologies (India). Xiaomi sources its smart TVs from Dixon Tech.

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.

Xiaomi India started its operations in India in the year 2014 and started remitting the money from the year 2015. It has remitted foreign currency equivalent to Rs 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 ED statement said.

However, Dixon Tech management clarified to the media on Monday that EDs seizure of Xiaomi India assets will have no impact with relation to payments.

Dixon Technologies (India) is the largest home-grown design-focused and solutions company engaged in contract manufacturing products in the consumer durables, lighting and mobile phones markets in India.

The company reported 24.7% decline in consolidated net profit to Rs 46.38 crore despite 40.8% increase in net sales to Rs 3,073.25 crore in Q3 FY22 over Q3 FY21.

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