- Wednesday, August 17, 2022
By: Shilpa Sharma
INDIAN e-commerce company Flipkart said the firm is in compliance with the country’s laws, and will cooperate with the Enforcement Directorate (ED) over the notice served to it.
The ED has issued a show cause notice of Rs 106 billion (£1.03 bn) to the e-commerce major and its promoters for alleged violation of the foreign exchange law.
Flipkart said it has not violated foreign direct investment (FDI) regulations or any other law.
“We will cooperate with the authorities as they look at this issue pertaining to the period 2009-2015 as per their notice,” Flipkart said in a statement.
The notice under various sections of the Foreign Exchange Management Act (FEMA) was issued to a total of 10 notices last month that includes Flipkart, its founders Sachin Bansal and Binny Bansal among others, agencies reported quoting sources.
The notice, issued after completion of investigation, includes charges related to violation of foreign direct investment (FDI) and multi-brand retail rules.
The US-based retail giant Walmart Inc owns a 77 per cent stake in Flipkart, which it bought for $16 bn (£11.5bn) in 2018. The company’s founders and many of its investors had taken a partial or complete exit at that time. Sachin Bansal had exited from Flipkart, selling his about 5.5 per cent stake.
In July, Flipkart Group had announced raising $3.6bn (£2.6bn) in funding led by GIC, Canada Pension Plan Investment Board, SoftBank Vision Fund 2 and Walmart, valuing the e-commerce giant at $37.6bn (£27bn).
In the Indian e-commerce market, Flipkart competes with companies such as Amazon and Reliance JioMart, and has seen significant growth over the past many years.
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