New Delhi: The Enforcement Directorate (ED) has seized Rs 5,551.27 crore of Xiaomi Technology India Pvt Ltd-- a wholly-owned subsidiary of China-based Xiaomi group-- under the Foreign Exchange Management Act (FEMA) in connection with illegal remittances made by the firm in February this year, the agency said on Saturday.

The seized amount of Rs 5,551.27 crore is lying in the bank accounts of Xiaomi Technology India Pvt Ltd, which started its operations in India in 2014 and started remitting the money in 2015.

The Company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi group entity in the guise of Royalty, said the ED.

"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," said the ED.

Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI. Xiaomi India procures the completely manufactured mobile sets and other products from the manufacturers in India.

"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 the guise of royalty abroad which constitutes a violation of Section 4 of the FEMA," said the federal agency.

ED further added that Xiaomi India also provided misleading information to the banks while remitting the money abroad.