Myntra Designs Pvt Ltd and its affiliated companies are the target of a Rs 1,654 crore Foreign Exchange Management Act (FEMA) case brought by the Enforcement Directorate (ED) for allegedly violating FDI regulations.
Key Highlights
- ED files FEMA complaint against Myntra and related firms under Section 16(3) for ₹1,654.35 cr FDI breach.
- Myntra allegedly used related-party Vector E-Commerce to divert wholesale into restricted retail sales, violating FDI norms.
he case is based on reliable information that Myntra and its affiliated businesses were engaging in multi-brand retail trading (MBRT) under the guise of "Wholesale Cash & Carry" operations, which is prohibited by the current FDI policy, according to a statement from the ED's Bengaluru Zonal Office.
The agency claims that this structure violated the FEMA, 1999 provisions by being used to get around FDI restrictions on direct consumer retail.
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Myntra's and its affiliated companies' directors are also named in the case. More information regarding personal responsibility or possible sanctions is anticipated as the investigation continues.
The probe is being conducted at a time when Indian e-commerce companies, especially those supported by foreign investment, are coming under more regulatory scrutiny for allegedly using intricate business arrangements to get around FDI regulations.
