ED INITIATES PROBE AGAINST AMAZON OVER ALLEGED FEMA VIOLATIONS
NEW DELHI: The Enforcement Directorate (ED) has registered a case against US e-commerce giant Amazon to investigate alleged violation of India’s laws dealing with foreign exchange and foreign direct investment, people familiar with the development, requesting anonymity, said on Thursday.
The investigation, launched under various sections of the Foreign Exchange Management Act (FEMA) is based on a recent Delhi high court observation that US based Amazon’s attempt to control Future Retail through a conflation of agreements it has with an unlisted unit of an Indian company without government’s approval will be considered a violation of FDI (foreign direct investment) rules and FEMA, they said.
The high court had said in its judgement (last month), on Amazon’ plea to challenge the acquisition of Kishore Biyani led Future Retail by Mukesh Ambani’s Reliance Industries Ltd for ₹24,713 crore in August 2020, that Amazon appeared to have indirectly obtained control of Big Bazaar without government’s approval.
Subsequently, the agency had received a reference from the Centre seeking action against e-commerce players including Amazon pertaining on the complaint of Confederation of All India Traders (CAIT), which has alleged that these companies violating norms in multi-brand retailing and indulged in malpractices.
In a response to email query by HT, an Amazon Spokesperson said, “We are not aware of any new case by the ED against Amazon India”.
ED officials dealing with the probe said they will examine all the issues pertaining to Amazon’s investment in Future Retail and points highlighted by CAIT in its complaint to the commerce ministry. “We will seek details from Amazon and other stakeholders,” an officer said, requesting anonymity.