ed takes action on myntra case filed under fema

The Enforcement Directorate registered a FEMA case against Flipkart-backed e-commerce platform, Miningra, concerned companies and directors for violation of FDI violation of more than Rs 1,654 crore. The ED said that after receiving reliable information to the federal agency, a complaint has been lodged under Section 16 (3) of the Foreign Exchange Management Act that the Minyantra Designs Private Limited, whose brand name is Minyantra, and its related companies are doing multi-brand retail trade under the guise of wholesale cash and carry.

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The Enforcement Directorate (ED) said that it is an alleged violation of the current Foreign Direct Investment (FDI) guidelines. A case has been registered against Bangalore -based Minyantra, companies associated with it and its directors. The investigating agency said it had received information that Mantra and its ally companies were doing multi-brand retail trading (MBRT) in the name of 'Bulk Cash and Carry' business in violation of the Foreign Investment (FDI) policy applicable in India. According to the investigation by the investigating agency, Mantra showed that she was doing wholesale business and on this basis, foreign investment of more than Rs 1654 crore was made. But in fact, Mining sold all her product vector to e-commerce private limited, which sold them to normal customers.

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Both Minyantra and Vector e-commerce are companies of the same group. B2B (Business to Business) was shown by sending goods from one company to another and then another company of the same group used to sell it to common customers and convert B2C (Business to Customer). Its purpose was to legally show wholesale trade, but should actually be retail trade.