In compliance with Indian laws, will cooperate with Enforcement Directorate on notice: Flipkart
Khevna.P.Shah, INN/Bangalore
@Shahkhevna1, @Infodeaofficial
Walmart-owned Flipkart on Thursday said the corporation is in compliance with Indian laws, including FDI regulations, and can cooperate with the Enforcement Directorate on the notice sent to the e-commerce major.
The Enforcement Directorate (ED) has issued a show cause notice of ₹10,600 crore to Flipkart and its promoters for alleged violation of the exchange law, official sources said on Thursday.
When contacted, Flipkart said it is in compliance with Indian laws and regulations, including FDI regulations. “We will cooperate with the authorities as they appear at this issue concerning the amount 2009-2015 as per their notice,” Flipkart added. Comments couldn’t be immediately elicited from the founders.
According to sources, the notice under various sections of the exchange Management Act (FEMA) was issued to a complete 10 notices last month that has Flipkart, its founders Sachin Bansal and Binny Bansal among others.
The notice was issued after completion of investigation and therefore the charges include violation of foreign direct investment (FDI) rules and people that regulate multi-brand retail, they added.
The case of alleged FDI rules violation against Flipkart has been under the ED scanner since 2012, and therefore the agency, as per official sources, has found alleged violations of FEMA under various counts including an instance of transfer and issue of security to a person/entity outside India.
Notably, the US-based retail giant Walmart Inc had picked 77 per cent stake in Flipkart for $16 billion in 2018. Its founders and lots of its investors had taken a partial or complete exit at that point . Sachin Bansal had exited from Flipkart, selling his about 5.5 per cent stake.
Last month, Flipkart Group had announced raising $3.6 billion (about ₹26,805.6 crore) in funding led by GIC, Canada pension account Investment Board (CPP Investments), SoftBank Vision Fund 2 and Walmart, valuing the e-commerce giant at $37.6 billion.
With this deal, SoftBank re-entered Flipkart’s cap table. SoftBank had sold its approximately 20 per cent share when Walmart bought a stake in Flipkart. Flipkart, which competes with companies including Amazon and Reliance JioMart within the Indian ecommerce space, has seen significant growth over the past few years .
