The Enforcement Directorate on Wednesday said it has filed a case against fashion ecommerce marketplace Myntra for FDI “contravention” of over Rs 1,654 crore.
The complaint has been filed against the Bengaluru-based Myntra, its linked companies and its directors under Section 16(3) of the Foreign Exchange Management Act, according to a press note shared by the federal agency.
The case was filed after the agency received “credible information” that Myntra Designs Private Limited, whose brand name is Myntra, and its related companies are doing multi-brand retail trade in the guise of “wholesale cash and carry”.
This, if true, would mean that the Nandita Sinha-led Myntra is allegedly in violation of the existing Foreign Direct Investment (FDI) guidelines. Flipkart-backed Myntra traces its majority ownership to US-listed retailer Walmart.
”While we have not received a copy of the subject complaint and the supporting documents from the authorities, we remain fully committed to cooperating with them at any point of time,” stated a Myntra spokesperson.
Last year in November, the ED had conducted searches at some vendors operating on the platforms of ecommerce majors like Flipkart and Amazon for FDI violations, according to media reports.
The primary aim of the investigation was to ascertain whether Amazon and Flipkart operated through a preferred set of sellers, which were invariably controlled by them but disguised as independent vendors, thus violating FDI norms, according to a report by The Economic Times, citing government officials.
(With inputs from PTI. The story was updated with comments from Myntra.)
Edited by Jyoti Narayan
