ED Files Complaint Under FEMA

The Enforcement Directorate (ED) on July 23, filed a complaint under the Foreign Exchange Management Act, 1999 (FEMA) against Myntra Designs Private Limited, its related entities, and their directors for alleged violations amounting to Rs 1,654.35 crore.

According to the ED, Myntra and associated entities carried out Multi-Brand Retail Trade (MBRT) operations while falsely claiming to operate as “Wholesale Cash & Carry" businesses. This alleged misrepresentation is in direct violation of the FDI policy, which restricts foreign investment in MBRT under certain conditions.

Myntra routed the majority of its sales through M/s. Vector E-Commerce Pvt. Ltd., a company from the same corporate group, which then sold the goods directly to end consumers, according to the ED.

The agency claims Vector was deliberately set up to mask what were essentially retail (B2C) transactions as wholesale (B2B) on paper, thereby bypassing FDI restrictions on multi-brand retail trading.