Enforcement Directorate targeted India’s online shopping giant Flipkart over violation of Foreign Exchange Management Act (FEMA) Rules. Notice has been issued under Flipkart, its founders, and nine others by the ED over alleged forex violations. Between the years 2009 and 2015, the company has violated the rules while attracting foreign investments, due to which they have to explain why they should not face a penalty of Rs 10,600 crore. The notice has been issued, under the founders Sachin Bansal, Binny Bansal, and nine members related to Flipkart, and the ED has asked them to respond to the notice within 90 days.
E-commerce giants like Amazon India, Flipkart have been under investigation by the ED for a long time now for allegedly bypassing the foreign investment laws, which strictly regulate multi-brand retail. Company Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was against the law, says ED sources.
“Flipkart complies with Indian laws and regulations, including foreign direct investment (FDI) regulations. We will cooperate with the authorities as they look at this issue about the period 2009-15 as per their notice,” a statement issued by Flipkart said.