Enforcement Directorate books Myntra, One Sigma for FEMA violation
In another case, ED filed a complaint under Section 16(3) of FEMA against Bengaluru-based 'One Sigma Technologies Pvt Ltd' (SIMPL) and its director Nithya Nand Sharma, for contravention to the tune of Rs 913,75,88,062 (Rs 913.75 crore). The company is behind the popular Buy Now Pay Later (SIMPL) app, which allows customers to buy now and pay later in instalments.
In an official release on Wednesday, the ED stated that inquiry into Myntra's books was initiated on the basis of 'credible information that Myntra Designs Private Limited (Myntra) and its related companies are doing Multi Brand Retail Trade (MBRT) in the guise of 'Wholesale Cash & Carry', allegedly in violation of the extant Foreign Direct Investment (FDI) policy'.
The ED investigation revealed that Myntra had 'declared that they were engaged in the business of wholesale cash & carry and invited and received FDI from foreign investors equivalent to Rs 1,654.35 crore, and that they sold a majority of their goods to Vector E-Commerce Pvt Ltd (which sold the goods in retail to the ultimate customer). Vector E-Commerce and Myntra are related parties and belong to the same group or group of companies'.
'Vector was created and continued to be used as a corporate entity to bifurcate the B2C (business to customer i.e Myntra to retail customers) transaction into B2B (Myntra to Vector) and then B2C (Vector to retail customers),' the ED added.
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