ED finds FEMA violation against Flipkart, penalty likely to be around Rs 1,000 crore

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After over two years of probe Enforcement Directorate is ready to slap a showcause notice to Flipkart.

Top sources in the Directorate told ET Now that, " Our investigation is over and our Bangalore team has found evidence of FEMA violation against Flipkart." Adding that a showcause notice will be issued soon.

The source who refused to be identified explained that India's top e-commerce company had violated provisions of FEMA as WS Retail, the holding company had investments from companies overseas.

FDI norms in India do not allow FDI in e-commerce especially in business to consumer models. In 2013, a year after ED's probe began, Flipkart changed its business model allowing buyers and sellers to deal independently on their platform.
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Source: ED finds FEMA violation against Flipkart, penalty likely to be around Rs 1,000 crore - Economic Times
 
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Flipkart becomes the first company to get $1bn investment. Gets slapped with a Rs 1k crore penalty soon after. Coincidence much?
 
The article does say that investigation has been on for 2 years. I guess they thought now that they can pay up so why not apply the fine now? :D
 
Exactly. Everything happens as per convenience. I mean in all these 2 years, nobody cared to speed up the investigation. But now since it has grown bigger than any other e-commerce company ever could, slap them with a huge fine. Go after everything they own too.
 
Even if Flipkart has reasons to believe that what they did was not breaking the rules, the government would change the rules and apply them retrospectively and fuck them :D Just what they did with Vodafone.
 

Foreign companies "Come! Make in India" is new motto!

They will come only if local competition is less!
 
amish said:
Foreign companies "Come! Make in India" is new motto!

They will come only if local competition is less!
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If that was the motto indeed then Walmart, Amazon and Ikea would have been flourishing by now. Amazon never got the FDI approval. Walmart is now selling stuff to Wholesalers. And nobody knows if Ikea is interested in coming to India anymore. LOL.

The only working motto is how to extract more money from everyone.
 
FK is actually singapore based company and WS Retail is India. As per the Indian law, NO Overseas company can invest in e-commerce business directly in India. So FK is partnered with WS Retail. That's what is disturbing ED now.

And FK's growth is unbelivable. It was started by two Amazon Ex employees (sachin, binny) in 2007 with just
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4 lakhs invesment and their market value had grown to 1 million US Dollars in 2009. Now their market value has grown upto 1 billion U.S Dollars this year.

This kinda growth in just 5 yrs is unbelivable. Even amazon took 7 yrs to reach this goal.
 

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