ED | Amazon
ED summons Amazon India, Future Retail officials in alleged FEMA breach case
New Delhi/UNI: Probing alleged violation of Foreign Exchange Management Act (FEMA) in the Amazon-Future deal, the Enforcement Directorate (ED) on Sunday summoned senior officials from the two companies, official sources said.
It has been learnt that ED wants Future Group promoters to be in attendance to verify the alleged claims of breach of rules in the 2019 deal in which Amazon picked up 49 per cent stake in the Kishore Biyani led firm Future Coupons Pvt Ltd (FCPL).
“We are in receipt of summons issued by the ED in connection with the Future Group. As we have just received the summons, we are examining it and will respond within the given time frame,” said an Amazon India spokesperson in response to a UNI query.
Amid the ongoing tussle between Amazon and Future Retail Ltd (FRL), the American retailer on Nov 24 flagged possible financial irregularities involving Future group companies.
In a letter to independent directors of Future Retail and its audit committee, Amazon stated that it is evident that transactions worth almost Rs 7,000 crore were undertaken between FRL and FEL, a company controlled by Biyani, in one financial year.
"These significant related party transactions between FRL and FEL seem to be followed by yet another transaction between these two entities in FY 2020-2021 where FRL has purchased goods and services from FEL for an amount of Rs 682 crore at a time when FRL claims to be under significant financial stress due to Covid-19 pandemic," Amazon Inc is learnt to have said in its letter seeking thorough probe.
Traders' lobby group Confederation of All India Traders (CAIT) has been demanding an ED probe into the affairs of Amazon India claiming that the American retailer is in violation of the FEMA and FDI rules.
Amazon has, however, challenged the allegations and is fighting court battle.
Commenting on a notice sent to Flipkart in August this year, CAIT had said that both Amazon and Flipkart are indulging in a preferential seller system on their respective marketplace which is against the FDI in e-commerce policy.
"We demand the Enforcement Directorate to send a similar notice to Amazon also since both Amazon & Flipkart are sailing in the same boat, "CAIT National President BC Bhartia and Secretary General Praveen Khandelwal had said in a joint statement.
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