Flipkart co-founder challenges Indian enforcement agency probe

0
22
imageStock Markets10 hours ago (Sep 04, 2021 11:40)

© Reuters. FILE PHOTO: Woman with smartphone is seen in front of displayed Flipkart logo in this illustration taken, July 30, 2021. REUTERS/Dado Ruvic/Illustration

NEW DELHI (Reuters) – Sachin Bansal, co-founder of e-commerce giant Flipkart, has mounted a court challenge against India’s financial crime-fighting agency, which has accused him and others of violation of foreign investment laws, court records showed.

The agency, the Enforcement Directorate, had in July issued a so-called show cause notice to Flipkart, its founders and some investors asking them to explain why they should not face a penalty of $1.35 billion for alleged violation of foreign investment laws between 2009 and 2015, Reuters reported last month.

Court records and media reports on Saturday showed Sachin Bansal has urged a state court in the southern state of Tamil Nadu to quash the agency’s notice, arguing that it was issued after an inordinate delay.

The judge in the case, R Mahadevan, heard the matter on Friday and asked the Enforcement Agency to file a response, reports said.

Sachin Bansal, the Enforcement Directorate and Flipkart did not immediately respond to requests for comment. Flipkart has previously said it was “in compliance with Indian laws and regulations” and would cooperate with authorities.

The Enforcement Directorate has been investigating e-commerce giants Flipkart and Amazon.com Inc (NASDAQ:AMZN) for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

Walmart (NYSE:WMT) took a majority stake in Flipkart for $16 billion in 2018, its biggest deal ever. Sachin Bansal sold his stake to Walmart at that time, while the other co-founder, Binny Bansal, retained a small stake.

The case concerned an investigation into allegations that Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was prohibited under the law, Reuters has reported.

In February, a Reuters investigation based on Amazon documents showed it had given preferential treatment for years to a small group of sellers, publicly misrepresented ties with them and used them to bypass Indian law. Amazon says it gives no preferential treatment to any seller.

Flipkart co-founder challenges Indian enforcement agency probe

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here