The Enforcement Directorate served a notice to Sachin Bansal, Binny Bansal & Tiger Global last month for alleged Foreign Exchange Management Act (FEMA) violations.
Flipkart co-founder Sachin Bansal has approached Madras High Court challenging the Enforcement Directorate notice served to them regarding Rs 10,600 crore Foreign Exchange Management Act (FEMA) violations, reported Times Now.
The notice was issued for the alleged non-compliance with the condition in the consolidated Foreign Direct Investment Policy of 2010 over issuances of shares to the group companies and foreign investors between 2009-2014.
The matter came up for hearing before Justice Mahadevan and the judge wondered why authorities failed to take action against the alleged violation for the past 12 years and the court has directed the Enforcement Directorate to file a response by three weeks.
To recall, the Enforcement Directorate served a notice to Sachin Bansal, Binny Bansal & Tiger Global last month for alleged Foreign Exchange Management Act (FEMA) violations. The notice was reportedly issued after completion of the investigation and the charges include violation of the foreign direct investment (FDI) rules and those that regulate multi-brand retail.
As per earlier reports, the case of alleged FDI rules violation against Flipkart has been under the ED scanner since 2012 and the agency has found alleged violations of the FEMA under various counts, including an instance of transfer and issue of security to a person or entity outside India.
They said the Walmart-owned company and its executives will now undergo adjudication that will be conducted by a Special Director-rank officer of the agency based in Chennai. Flipkart had said it was cooperating with the ED in this investigation. “Flipkart is in compliance with Indian laws and regulations, including FDI regulations. We will co-operate with the authorities as they look at this issue pertaining to the period 2009-2015 as per their notice.
For the uninitiated, proceedings under FEMA are civil in nature and the final penalty, post-adjudication, can be at least three times the amount contravened under the law.