ED Files FEMA Complaint Against Myntra for Alleged FDI Violations
The Enforcement Directorate (ED) has filed a complaint against Myntra Designs Pvt. Ltd. and its affiliates under the Foreign Exchange Management Act (FEMA). The complaint alleges that Myntra received foreign direct investment (FDI) worth Rs 1,654.35 crore under the guise of a wholesale model but allegedly channeled nearly all its sales to a related company for retail sales, violating FDI rules.
The ED claims that Myntra's corporate structure was designed to make business-to-consumer (B2C) transactions appear as business-to-business (B2B), bypassing restrictions on FDI in multi-brand retail trading. The complaint cites Section 6(3)(b) of FEMA and related clauses in the Consolidated FDI Policy as the legal basis for the allegations.
Myntra, however, has stated that it has not received the complaint and is committed to compliance with all applicable laws and regulations. The company has also expressed its willingness to cooperate with the authorities in the matter.
The ED's move signals intensifying regulatory scrutiny of e-commerce platforms with complex corporate structures. The case has been referred to the Adjudicating Authority under FEMA for further proceedings. Myntra, which operates one of India's largest online fashion portals, now faces potential penalties and reputational damage if found guilty of violating FDI norms.
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