New Delhi. The Enforcement Directorate has taken major action against e -commerce company Myntra. The ED has registered a case against the Mantra Designs Private Limited, associated with it and their directors under the Foreign Exchange Management Act, 1999 (FEMA). This is a case related to foreign currency violations of Rs 1654.35 crore. It is alleged that Myntra did a multi-brand retail business in India bypassing the rules, while in the name of wholesale business it made more than 1654 crore foreign investment. The ED is investigating the FDI policy violation case.
The ED was informed that Mantra Designs Private Limited and its associate companies were doing multi -brand retail businesses in the name of wholesale Cash and Carry. Myntra sold all its products vector e Commerce Private Limited Company and sold products to common customers in retail. Both Myntra and Vector E Commerce are of the same group. According to the FDI policy, any wholesale company can sell goods only up to 25 percent to any other company of its group. While Minyantra sold 100 percent of the goods to his company, which is a violation of the law.
In this way, two companies of the same group were shown to be a legitimate wholesale business and actually done a retail business. The ED is investigating the same case and has also started investigating some documents and financial records of the company. Explain that FEMA makes foreign investment and business easier and the company or individual misuse of foreign funding like money laundering and tax evasion is also monitored. Significantly, Myntra’s parent company is Flipkart. Flipkart bought Myntra for Rs 2,000 crore in 2014.
