Myntra Faces ED Probe: Government Agency Books Online Shopping Platform in 1,654 Crore FEMA Violation Case
ED on Wednesday said that it has filed a formal complaint against Myntra Designs Private Limited, its related companies, and their directors for alleged violations under the Foreign Exchange Management Act (FEMA), 1999. The action was taken by the Bengaluru Zonal Office of the ED, accusing the company of illegal foreign investment practices amounting to Rs 1,654.35 crore.
New Delhi, July 23: The Enforcement Directorate (ED) on Wednesday said that it has filed a formal complaint against Myntra Designs Private Limited, its related companies, and their directors for alleged violations under the Foreign Exchange Management Act (FEMA), 1999. The action was taken by the Bengaluru Zonal Office of the ED, accusing the company of illegal foreign investment practices amounting to Rs 1,654.35 crore.
According to an official statement, the ED launched its investigation based on credible information that Myntra and its related companies were allegedly engaged in multi-brand retail trading (MBRT) while claiming to operate as a wholesale cash and carry business. This setup, the ED said, is in direct violation of India’s Foreign Direct Investment (FDI) policy. Myntra Refund Scam: How Fraudsters Dupe Myntra of INR 1.1 Crore by Exploiting Loophole in Refund Option.
The ED’s investigation revealed that Myntra Designs Private Limited had received foreign direct investment worth over Rs 1,654 crore by declaring that it was involved in wholesale business. However, the agency found that the company sold most of its goods to another firm -- Vector E-Commerce Private Limited -- which then sold those goods directly to retail customers.
What raised concerns, the ED noted, is that both Myntra Designs and Vector E-Commerce belong to the same group of companies. The structure was allegedly created to bypass FDI rules by disguising direct retail sales as business-to-business (B2B) transactions followed by retail (B2C) sales through Vector. Myntra and Reliance-Owned Ajio Ban Turkish Brands Amid Rising Boycott Turkey Calls Over Support to Pakistan Following ‘Operation Sindoor’.
The ED added that Myntra’s operations violated the FDI rules introduced in April and October of 2010, which clearly state that only up to 25 per cent of wholesale sales can be made to group companies. Myntra, however, made 100 per cent of its sales to Vector, which the ED claims is a clear breach of the law. Based on these findings, the ED has filed a complaint under Section 16(3) of FEMA, 1999 before the Adjudicating Authority. The agency alleges that the companies involved have violated Section 6(3)(b) of FEMA and the Consolidated FDI Policy guidelines to the tune of Rs 1,654.35 crore.
(The above story first appeared on LatestLY on Jul 23, 2025 03:07 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).