Flipkart: FEMA Show-cause Notice Served By ED For Violations

    Flipkart, its founders, and nine others have been served a show-cause notice by Enforcement Directorate (ED) over alleged forex violations and face a penalty of ₹ 10,600 crores for alleged violation of foreign investment laws.

    Sources from the enforcement agency said that Flipkart violated Foreign Exchange Management Act (FEMA) rules while attracting foreign investments between 2009 and 2015.

    The notice has been served to Sachin Bansal, Binny Bansal and nine other entities connected to Flipkart with a window for the company has been asked to respond to the notice in 90 days.

    Meanwhile, Flipkart in a statement said “Flipkart is in compliance with Indian laws and regulations, including foreign direct investment (FDI) regulations. We will cooperate with the authorities as they look at this issue pertaining to the period 2009-15 as per their notice.”

    Flipkart, Founders and 9 others gets Rs. 16000 cr FEMA Violation Notice by ED

    ED serves notice to Flipkart for FEMA violations

    The Enforcement agency has been investigating e-commerce giants Flipkart and Inc for quite some time for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

    ED sources further informed that the case concerned an investigation into allegations that Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was prohibited under law.

    The notice is the latest regulatory headache for the online retailer, which is already facing tougher restrictions and antitrust investigations in India, and a growing number of complaints from smaller sellers.


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