India’s financial-crime agency has asked Walmart’s Flipkart and its founders to explain why they should not face a penalty of US$1.35 billion for alleged violation of foreign investment laws, three sources and an agency official told Reuters.
The Enforcement Directorate agency has been investigating e-commerce giants Flipkart and Amazon for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.
The Enforcement Directorate official, who declined to be named, said 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 law.
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