'Recognize error, pay fine': Ed offers to close FEMA offense case against Flipkart on conditions - what we know

The Directorate for Enforcement (ED) has offered to close the violations of the Foreign Exchange Management Act (FEMA) related to the e-commerce major Flipkart, according to certain conditions, PTI reports with reference to sources. The agency told Flipkart that the case could be settled if it recognized offenses and paid a fine. “Ed gave the option to compose to Flipkart. Ed asked Flipkart to admit his mistake, pay a fine and make the seller network involved,” a source told Pti. Flipkart did not respond to inquiries, the report added. The ED also investigates Amazon India for similar allegations related to discounts and violations of competition. When a spokesperson for Amazon India was contacted, he said: “We do not comment on continuing investigations.” Ed offers to close FEMA case against Flipkart: What we know, the Walmart possession Flipkart offered the option to close a FEMA offense case if the firm recognized its error and paid a penalty, sources told Pti. The option was given by the Directorate for Enforcement to Flipkart last week under the composite rules of Fema, it states. The ED did not respond to PTI inquiries, but sources told the agency that no such offer was offered. However, one of the company official told the agency that the composite option given by ED is to strengthen India’s negotiating power during the ongoing bilateral trade negotiation with the US. What are compound rules? The composite rules enable companies to voluntarily recognize the determination under the FEMA and resolve the case by paying a fine for the offenses without undergoing long enforcement actions. Flipkart and Amazon India were examined for alleged violation of FEMA provisions. What are the allegations against Flipkart, Amazon India? Flipkart and Amazon India are accused of pushing off their platform to obtain sales. In July 2021, the ED first issued a notice on the cause of Flipkart, related firms and individuals, and he asked his answer about why further proceedings under India’s direct direct investment (FDI) regulations should not be instituted on the basis of alleged violations during the 2009 to 2015 period. The notice was related to the period between 2009 and 2015, before the majority interest in Flipkart, was obtained by the US Major Walmart. Walmart acquired a majority interest in Flipkart in 2018. ED also notified Flipkart, even after the acquisition by Walmart for investigation into 2016. The most recent notice was submitted to the company in April this year. CCI investigates Flipkart for similar offenses The Competition Commission of India (CCI) also investigates Flipkart regarding alleged violations of competition by certain Flipkart subsidiaries in India and other parties. In September 2024, a non-confident version of the CCI DG investigation report was received by one of the Flipkart subsidiaries claiming that certain offenses of competition legislation. (With input from PTI)