Flipkart under ED lens over FDI violations
Enforcement Directorate may soon impose a penalty on e-commerce major Flipkart after it conducted a probe on the company’s trade practices. The extent of penalty is yet to be ascertained while some speculate it would be to the tune of Rs 1000 crore.business Updated: Oct 14, 2014 23:07 IST
Enforcement Directorate (ED) may soon impose a penalty on e-commerce major Flipkart after it conducted a probe on the company’s trade practices. The extent of penalty is yet to be ascertained while some speculate it would be to the tune of Rs 1000 crore.
ED, which probes financial irregularities, mainly money laundering and foreign exchange rule violations, is also probing other e-commerce companies, according to people within the organisation.
“The quantum of irregularity has been calculated. The investigation is still on. We are yet to fix a penalty,” said highly placed sources at Enforcement Directorate. “We are probing other businesses as well because of which we cannot reveal what we have learned about Flipkart…It will alert others,” he said on condition of anonymity.
“We are in complete compliance with the laws of the land and will cooperate with authorities when required,” Flipkart spokesperson responded.
Sources in the e-commerce industry said ED had, two months ago, sent an enquiry note to several companies asking about the sales model. Flipkart’s rival Amazon said “We are fully compliant with the regulators”.
Another major player Snapdeal is yet to respond.
Following many complaints from traders on huge discounts offered by Flipkart, the government had assured them that it would look into their concerns. Commerce minister Nirmala Seetharaman said a few days ago that the government received lot of complaints and it would into them.