Karnataka HC extends stay on the ED order seizing Xiaomi India’s bank assets until June 1

The Karnataka High Court has prolonged the stay on ED's decision to freeze Xiaomi India’s bank assets worth  above Rs 5500 crore.

Justice SG Pandit's single judge bench delayed the case until June 1 and prolonged the earlier stay  order on the seizure until then.

The court had previously granted the smartphone manufacturer respite to obtain bank overdrafts to make payments for its daily operations on Thursday, excluding a royalty of Rs 5500 crore to foreign technology suppliers, that was frozen by the Enforcement Directorate (ED), in an order issues on April 29.

Xiaomi India is accused by the ED with violation of the Foreign Exchange Management Act (FEMA), saying that the business allegedly remitted money to three companies outside of India under the pretence of royalties payment.

A single-judge bench, led by Justice Sunil Dutt Yadav, delivered the order after Xiaomi India sought the court on Thursday for clarification of its ruling from May 5.

Xiaomi informed the court that the banks blocked all of the company's payments after its May 5 ruling. Including day-to-day expenses for purchasing auxiliary items for manufacturing.

Xiaomi's lawyer told the HC on Thursday, that the firm was being targeted because it was Chinese. Xiaomi is said to have a 25% portion of the Indian smartphone industry, and other firms with 75% market share have been paying royalties to the same foreign companies for the past 12 years.

"Because I am Chinese and they are not, no action is taken against them. This is the sole constraint. The issue is that, they merely want to exact vengeance on China", claimed the lawyer.