Flipkart, Sachin and Binny Bansal will be Fined by 10,600 Crores

The Enforcement Directorate has issued show cause notices to Flipkart founders Binny Bansal, Sachin Bansal and investor Tiger Global.
Flipkart, Sachin and Binny Bansal will be Fined by 10,600 Crores
Image Credit: The Financial Express

The Enforcement Directorate (ED) can impose a fine of $ 1.35 billion or about Rs 10,600 crore on the country's leading e-commerce company Flipkart and its founders. Walmart-owned company has been issued a show-cause notice for violating foreign investment laws.

Investigating Flipkart and Amazon

Image Credit: Entrackr
Image Credit: Entrackr

Binny Bansal and Sachin Bansal are accused of violating foreign investment laws. The matter was reported to Reuters by three sources and an ED official. In this context, the ED official said that Flipkart is alleged to have attracted foreign investment and then the related party WS Retail sold goods to consumers on its shopping website. While it is prohibited under the law. The investigating agency is investigating Flipkart and Amazon for foreign investment laws.

Sachin, Binny Bansal, and investor Tiger Global

According to sources, in July, the Enforcement Directorate had issued show-cause notices to Sachin Bansal, Binny Bansal, and existing investor Tiger Global, asking why they should not be fined Rs 10,600 crore. Actually, this case is from the year 2009 to 2015. The notice was issued under various sections of the Foreign Exchange Management Act (FEMA).

A Flipkart spokesperson has said that the company is complying with Indian laws and will fully cooperate with the company authorities. At the same time, the source said that WS Retail had ceased operations at the end of 2015 itself.

Image Credit: G Static
Image Credit: G Static

Company ready to bring IPO

It is to be known that US retail company Walmart had said that it is ready to bring an initial public offering (IPO) for its Indian e-commerce arm Flipkart. In this context, Walmart International President and CEO Judith McKenna said at the 'DB Access Global Consumer Conference' that both Flipkart and payments app PhonePe are doing well. "From the day we made the acquisition or investment, we have clarified that we are ready for IPO," he said.

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