HC extends stay on ED order seizing Xiaomi India assets till June 1

The Karnataka High Court has extended the stay on the Directorate of Enforcement (ED) order to freeze Xiaomi India's bank assets above Rs 5500 crore.

A single judge bench of Justice SG Pandit adjourned the matter to June 1, and extended the earlier stay order on the seizure till then.

ED had charged Xiaomi India for foreign exchange violations under the FEMA act, alleging the company remitted money to three companies outside India under the guise of royalty payments.

The court had earlier given relief to the smartphone market leader to carry on day-to-day business and to import items essential to the business by taking bank overdraft.

However, the company is barred from making royalty payments to any firm outside India.

Xiaomi India had filed a writ petition in May to quash the ED order, which the company claimed, has been passed with arbitrary exercise of ED's power driven by vindictiveness.

The company alleged that its officers had been coerced and threatened of dire consequences by agency officials during the course of questioning.