The Enforcement Directorate has slapped a $1.35 billion or Rs 10,600 crore penalty on the Walmart backed e-commerce giant Flipkart over alleged foreign investment laws violation.
This is the biggest show-cause notice under the Foreign Exchange Management (FEMA) Act.
Flipkart's founders Sachin Bansal and Binny Bansal as well as its investor Tiger Global received a show-cause notice in July by the agency. Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was prohibited under law, the report mentioned.
Walmart-owned company and its executives will now undergo adjudication that will be conducted by a Special Director-rank officer of the agency based in Chennai.
Indian regulatory authorities have been keeping a close eye on e-commerce platforms Flipkart and Amazon. Both are already facing anti-trust investigations.