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Tag: Enforcement Directorate

  • ED Allows Flipkart to Settle FEMA Violation Case by Paying Penalty

    According to various media reports, the Enforcement Directorate (ED) has offered to close a FEMA violation case against the Walmart group company Flipkart, provided it acknowledges its error and pays a fine.

    Flipkart was granted the option last week by the Enforcement Directorate in accordance with the Foreign Exchange Management Act’s (FEMA) compounding provisions. Flipkart has been given the option to compound, according to a PTI report. Flipkart has been requested by ED to acknowledge its error, pay a fine, and shut down the seller network connected to it.

    ED Also Summoned Amazon

    Amazon India was also called by the ED to enquire about the company’s condition. An Amazon India representative who was contacted stated that the business does not comment on investigations that are still underway.  But according to ED sources, they haven’t offered Flipkart any offers regarding compounding.

    The compounding option provided by the ED is intended to increase India’s bargaining position in the current bilateral trade negotiations with the United States, according to an official of one of the e-commerce companies who spoke on condition of anonymity.

    Without having to deal with drawn-out enforcement processes, firms can use the compounding rules to freely admit violations of the FEMA regulation and settle the case by paying a penalty for the violations. The ED has been investigating Flipkart and Amazon India for allegedly violating FEMA regulations.

    Why E-Commerce Players are Under ED Scanner?

    Allegations have been made that these businesses are using their platform to promote deals in an effort to increase sales. In July 2021, the ED first sent a show-cause notice to Flipkart, associated companies, and individuals, asking them to explain why they shouldn’t face additional charges under India’s Foreign Direct Investment laws and regulations for alleged infractions from 2009 to 2015.

    The notification referred to the years 2009–2015, prior to the U.S. giant Walmart acquiring the majority of Flipkart. Even after Flipkart was acquired by Walmart, ED nevertheless sent notice to the company to look into its operations after 2016. The corporation received its most recent notice in April of this year. Flipkart is also under investigation by the Competition Commission of India for alleged violations of competition laws by some of its Indian subsidiaries and other parties.

    One of Flipkart’s subsidiaries obtained a non-confidential copy of the CCI DG’s Investigation Report in September 2024, which contained allegations of specific violations of competition law.

    Quick Shots

    •ED offers Flipkart the option to settle a FEMA
    violation case by paying a penalty.

    •Walmart-owned Flipkart asked to acknowledge errors
    and close related seller network.

    •Compounding option given under Foreign Exchange
    Management Act (FEMA) provisions.

    •Amazon India also summoned by ED for similar
    FEMA-related enquiries.

    •ED’s move seen as part of India’s tightening
    scrutiny of e-commerce giants.

    •FEMA case dates back to 2009–2015, before Walmart’s
    acquisition of Flipkart.

  • Anil Ambani Under ED Probe for Alleged INR 68 Cr Fake Bank Guarantee Fraud

    The current inquiry by the Enforcement Directorate (ED) into claims of financial irregularities in the Anil Ambani Group has been stepped up. According to NDTV Profit, the corporation has also started an investigation into the INR 68.2 crore Anil Ambani fresh probe issue.

    On the evening of July 28, the ED conducted a series of searches for Anil Ambani in four locations, three of which were in Bhubaneswar and one in Kolkata.

    The searches were connected to a business called Biswal Tradelink Pvt. Ltd., a modest organisation under investigation for running a network of shell corporations and providing a phoney bank guarantee worth INR 68 crore to pay commissions.

    INR 68 Cr Fake Bank Guarantee: What Happened

    Authorities claim that Biswal Tradelink gave the Solar Energy Corporation of India (SECI) a fictitious bank guarantee worth approximately INR 68.2 crore. The company was accused of charging an 8% commission for phoney bank guarantees in the Reliance Group scandal.

    Shell Companies and Cloned SBI Emails: The Scam’s Modus Operandi

    The thieves used a phoney domain, s-bi.co.in, that was made to resemble State Bank of India’s official website (sbi.co.in).

    By sending phoney emails that appeared to be from SECI and other organisations, the cloned domain was utilised to deceive them. By locating communications from suspects, ED officials have demonstrated that the network was using Telegram’s disappearing chat function to evade detection and maintain secrecy.

    It was thought that the bank guarantee in the Anil Ambani fraud case was set up to facilitate the transaction between Maharashtra Energy Generation Limited and Reliance NU BESS Private Limited, both of whom are associated with the Anil Ambani business group.

    Based on falsified communications that were intended to mimic the State Bank of India (SBI), the agency has concluded that the bank’s guarantee was a fraudulent bank guarantee cost.

    When interacting with SECI, the syndicate reportedly tried to pass off the assurance as genuine by substituting the falsified email address “s-bi.co.in” for “sbi.co.in.”

    The Decline of Anil Ambani’s Business Empire

    Anil Ambani’s attempts to join a number of industries, such as entertainment, defence, and infrastructure, were not very successful. When the Allahabad High Court invalidated the land purchase in 2009, it was a major blow to his plans to build a massive gas-based power station in Dadri, Uttar Pradesh. Additionally, his forays into the entertainment sector, which included agreements with Adlabs and DreamWorks, did not provide the anticipated results.

    When his telecom business, Reliance Communications (RCom), started to accrue significant debt, financial difficulties worsened. The business entered insolvency proceedings in 2019. In the same year, after RCom failed to pay INR 550 crore to Ericsson AB’s Indian unit, the Supreme Court threatened to put Ambani in jail, putting him under intense legal pressure.

    By stepping in at the last minute to supply the required finances, Mukesh Ambani was able to keep his brother out of jail. Anil Ambani faced more legal difficulties after three Chinese banks filed a lawsuit against him in a London court over a $680 million loan default.

    Anil allegedly offered a personal guarantee when the loans were given to RCom in 2012. Ambani said in court, however, that he had only offered a non-binding “personal comfort letter,” not an asset-tied assurance. This case is still pending resolution.

  • Myntra Under ED Investigation for Alleged INR 1,654 Crore FEMA Breach

    For suspected violations of the Foreign Direct Investment (FDI) regulations of INR 1,654.35 crore, the Enforcement Directorate (ED) has filed a complaint against Myntra, an Indian fashion e-commerce company, as well as its affiliated businesses and directors.

    According to the probe agency’s statement, the case was filed in its Bengaluru Zonal Office based on reliable information indicating that Myntra Designs Pvt. Ltd. and its affiliated companies were violating India’s FDI policy by engaging in Multi-Brand Retail Trading (MBRT) while posing as “Wholesale Cash & Carry” businesses.

    The Alleged FDI Violation Explained

    According to investigations, Myntra was given FDI totalling INR 1,654.35 crore under the guise of running a wholesale company. However, it was discovered that a sizable amount of the merchandise was sold only to M/s Vector E-Commerce Pvt. Ltd., a subsidiary of the same business group, who subsequently marketed the merchandise to final customers.

    According to the ED, this structure was purposefully designed to divide direct business-to-consumer (B2C) transactions into a business-to-business (B2B) agreement between Vector and Myntra and then a business-to-consumer (B2C) model between Vector and the retail customers. As per the agency, this essentially got around the FDI regulations’ limitations on multi-brand retail.

    FEMA and FDI Policy Breaches Detailed

    Additionally, enterprises using the wholesale model are only allowed to sell up to 25% of their goods to linked group companies under the FDI policy changes of April 1, 2010, and October 1, 2010. But according to the ED, Myntra exceeded this cap by giving Vector E-Commerce 100% of its sales.

    Myntra Designs Pvt. Ltd. and others were found to have breached section 6(3)(b) of FEMA, 1999, as well as pertinent laws of the Consolidated FDI Policy, according to the inquiry agency’s findings.

    A complaint has now been filed under Section 16(3) of FEMA for additional legal action in light of these findings, according to ED. Myntra did not respond to the situation right away. The case’s registration demonstrates the increased regulatory scrutiny of FDI norm compliance in the e-commerce industry.

    Myntra’s Recent Financial Activity

    This year, Myntra has been raising a lot of money from its parent company in Singapore. Myntra raised an additional INR 1,062 Cr from Singapore parent company FK Myntra Holdings in May, following a new capital infusion of INR 709 Cr from Flipkart in February.

    In the highly competitive fashion e-commerce sector, the fashion e-commerce company is currently seeking to increase its revenue streams. Myntra has started two costly business experiments in the last several months: Singapore became the first foreign market under Myntra Global when the business launched its e-commerce platform there in May.

    Expansion Moves Amid Regulatory Heat

    With 6.5 lakh Indians living in Singapore, the Flipkart-owned portal hopes to reach 12% to 15% of the population. With its new platform M-Now, the corporation has been experimenting with the delivery structure of rapid commerce. In June, Myntra brought M-Now online in Delhi and Mumbai after introducing the 10-minute delivery option in Bengaluru.

  • ED Targets Celebs: Vijay Deverakonda, Prakash Raj Among 27 Booked in Betting App Scam

    Based on a First Information Report (FIR) submitted by the Cyberabad police in Hyderabad, Telangana, the Enforcement Directorate (ED) has opened an investigation against 29 celebrities in relation to a purported betting application fraud.

    Prominent actors Vijay Deverakonda, Rana Daggubati, Manchu Lakshmi, Prakash Raj, Nidhi Agarwal, Ananya Nagalla, and television host Srimukhi are among those named in the case. The ED is presently looking into the digital trail and financial activities connected to the mentioned people. Investigations are still in progress.

    25 people, including Rana Daggubati, Prakash Raj, Manchu Lakshmi, and Nidhi Agarwal, were charged by the Miyapur Police in Cyberabad on March 19 for allegedly endorsing betting applications.

    What FIR States?

    Sections 318(4) and 112, read with Section 49 of the Bharat Nyay Sanhita, Section 4 of the Telangana State Gaming Act (TSGA), and Section 66-D of the Information Technology Act, were the charges against the actors and media influencers, according to the First Information Report (FIR) that a media group sought.

    These clauses address internet deception, unlawful gambling marketing, and fraudulent activities. According to the FIR, Nidhi Agarwal with Jeet Win, Vijay Deverakonda with A23, Manchu Lakshmi with Yolo 247, Praneetha with Fairplay, and Rana Daggubati and Prakash Raj were linked to the promotion of Junglee Rummy.

    According to the accusations, the influencers and actresses used internet pop-up ads to promote these betting sites, possibly inciting people to gamble illegally.

    Responses from Celebs

    In a post on X, Prakash Raj clarified his stance by stating that he had supported a gaming app in 2016 but had pulled out in 2017 after determining it was improper.

    He claimed that since then, he has not advertised any gaming apps and that he would react if the cops came up to him.

    Rana Daggubati, meanwhile, claimed that his support for a skill-based gaming platform expired in 2017 and was limited to areas that were legally allowed. Citing the Supreme Court’s ruling that separates skill-based games from gambling, his legal team made sure that everything was in line.

    ED Tightening Screws on Gaming Apps

    In relation to the marketing of prohibited betting sites like 1xBet, FairPlay, Parimatch, and Lotus365, the ED previously questioned actors Sonu Sood and Urvashi Rautela, as well as former cricket players Harbhajan Singh, Yuvraj Singh, and Suresh Raina, last month.

    A money laundering scheme connected to illicit gaming and betting applications through Kirana outlets was also discovered by the federal government last year.

    According to reports, the owners of the Kirana stores thought they operated under the RBI’s domestic money transfer (DMT) program and were ignorant of their involvement in unlawful gaming.

  • ED Cracks Down on Probo, INR 284 Cr Seized in Major Opinion Trading Raid

    On 9 July, the Enforcement Directorate (ED) said that it had begun a significant crackdown on the illicit online betting site “Probo,” carrying out search operations on July 8 and 9 throughout its four Haryana locations.

    The online platform “Probo” was created by Probo Media Technologies Pvt. Ltd., and its promoters, Sachin Subhaschandra Gupta and Ashish Garg, were the targets of searches conducted in Gurgaon and Jind under the Prevention of Money Laundering Act (PMLA).

    According to the study, international companies with headquarters in Mauritius, the Cayman Islands, and other offshore locations have contributed INR 134.84 crores in equity to Probo.

    ED’s Action After Various FIRs Filled Against the Firm

    Following several First Information Reports (FIR) filed in Gurugram, Palwal (Haryana), and Agra, the ED started action against Probo for allegedly deceiving customers with promises of making money through “yes or no” questions.

    The FIRs claim that what seemed to be a respectable skill-based game was actually a type of betting that encouraged compulsive gambling behaviours under the pretext of opinion trading on subjects like election outcomes.

    The ED confiscated a number of digital records and damning documents, frozen investments totalling INR 284.5 crore in shares and fixed deposits, and three bank lockers that belonged to the accused.

    The FIRs said that Probo shunned Know Your Customer (KYC) authentication and lacked security measures to stop children from using the software. In order to entice new members, it also featured deceptive ads that advertised betting under the pretext of “opinion trading.”

    According to the ED’s inquiry, the games on Probo were completely based on chance and had a framework that was exactly the same as gambling: binary “yes/no” questions with just two possible answers.

    What is Probo?

    Probo, an event trading website founded in 2019 by Gupta and Garg, enables users to exchange their thoughts about upcoming events in a variety of fields, including politics, cricket, and finance.

    Supported by well-known companies like Elevation Capital and Peak XV Partners, Probo has apparently garnered over $28 million in funding so far. Probo’s action follows the Haryana government’s notification of the Prevention of Public Gambling Act, 2025, which aims to deter and punish public gambling as well as sports and election betting.

    The company’s sales increased by 5.4 times to INR 459 crore from INR 86 crore in FY23 during the fiscal year that ended in March 2024.

    In the meantime, the company’s FY24 profits shot up to INR 92 crore. The business has not yet submitted its FY25 financial statements.

    Probo Responds to ED Action

    In response to the Enforcement Directorate’s ongoing investigation, Probo Media Technologies Pvt. Ltd. has issued a formal statement asserting its cooperation with authorities and reaffirming its compliance with Indian laws.

    The company stated that it operates as a skill-based information marketplace aimed at democratising event-based trading in India. Probo emphasised that it serves over 4.2 crore users and aims to democratise access to information-driven trading, which it claims offers financial opportunities not available through traditional markets.

    “In light of recent developments, we would like to assure all stakeholders and the public that Probo is cooperating with law enforcement authorities in the ongoing inquiries,” the company said in an official statement. “We remain confident that our commitment to compliance and innovation will help us emerge stronger through this process.”

    Probo also expressed its trust in India’s regulatory framework and stated that user safety and regulatory adherence remain top priorities. The company added that it will continue to share updates as appropriate.

  • EaseMyTrip Denounces Connections to the Mahadev Betting App Following ED Raids

    Regarding the Enforcement Directorate’s raids on its property in relation to the Mahadev betting app case, online travel aggregator (OTA) Easemytrip has provided an explanation. EaseMyTrip denied any affiliation with the Mahadev app or any other betting site in a statement released today. According to information in the public domain, the Enforcement Directorate (ED) searched more than 50 places belonging to different individuals and corporations. The EaseMyTrip premises was one of them. According to a corporate spokeswoman, EaseMyTrip is entirely committed to working with the authorities during the inquiry, even though the company has no direct or indirect affiliation with the Mahadev Betting App or any other betting platform. The statement was made a day after it was reported that the central investigative agency, ED, had raided multiple locations nationwide connected to Nishant Pitti, the co-founder and Chairman of EaseMyTrip. The ED’s money laundering investigation into the Mahadev betting scam, which defrauded unsuspecting investors of an astounding INR 20,000 Cr, included the searches.

    No Conducive Evidence Found

    According to a fresh agency report, investigators investigating the case said that no serious proof has been discovered so far during the searches at locations connected to EaseMyTrip. As part of its ongoing money laundering probe into the INR 20,000 Cr Mahadev betting case, ED is reportedly conducting raids at multiple sites throughout the nation connected to Nishant Pitti, co-founder and Chairman of online travel aggregator EaseMyTrip. According to a media house, which cited sources, the raids are presently taking place in 15 different places in India, including Delhi NCR, Mumbai, Chandigarh, Ahmedabad, Indore, Jaipur, Chennai, and Sambalpur. The Mahadev app was operated by Saurabh Chandrakar and Ravi Uppal, according to the ED’s probe. It enabled users to place real-time wagers on sports including tennis, football, and cricket. At its height, the app had close to 10 million users. The ED previously claimed that Bhupesh Baghel, the former chief minister of Chhattisgarh, had collected kickbacks from the Mahadev app’s developers of more than 500 Cr. Baghel, however, denied these allegations, calling them attempts to damage his reputation.

    What Exactly is Mahadev Betting Scam?

    One of the largest illicit betting schemes in India was the Mahadev Online Book app, which cheated Indian investors out of over INR 20,000 Cr. The Mahadev app was blocked by the Ministry of Electronics and Information Technology (MeitY) in 2023 for breaking the nation’s money laundering regulations. Through questionable banking practices or “hawala” transactions, the app was being used to launder money between India and Dubai, according to the ED’s probe. An estimated INR 20,000 Cr was obtained from the crime in this instance; of that amount, INR 1,100 Cr was transferred into the stock market using fictitious bank firms and dummy accounts. After Chandrakar’s extravagant wedding ceremony in the United Arab Emirates garnered media attention in February 2023, the Mahadev betting app scam was exposed. At least six Indian superstars were paid to perform at the wedding, which cost about INR 200 Cr. Chandrakar’s relatives were transported from India by private aircraft. According to reports, the investigation team later arrested about a dozen people in connection with the money laundering case involving the Mahadev Book app and frozen funds totalling more than INR 1,700 Cr. According to sources, Chandrakar, the suspected mastermind of the Mahadev betting fraud, was taken into custody in the United Arab Emirates in October of last year.

  • ED Seizes INR 1,646 Cr in Assets Amid Global Crypto Scandal

    According to reports, the Enforcement Directorate (ED) made one of the largest seizures in a single search operation by an Indian agency, seizing assets valued at INR 1,646 Cr ($189.5 Mn). According to a media report, the operation was a component of a US-led probe into a $2.4 billion cryptocurrency “ponzi” scam that reportedly defrauded hundreds of investors across more than 40 nations. According to the report, which cited sources, the ED tracked Bitconnect founder and scandal mastermind Satish Kumbhani to Ahmedabad. Following his indictment in the scam by a US district court, where he was charged with operating a global Ponzi scheme under the guise of a Bitconnect loan scheme, Kumbhani fled into hiding.

    What Next?

    Kumbhani will soon be questioned by the ED and is probably going to be arrested, according to the report. There is a “look out circular” against him. The ED is seeking to return the proceeds of crime to the victims of the scandal, including overseas nationals, following the seizure of cryptocurrency assets on February 12. The BitConnect creator was charged by a grand jury in San Diego, California, in 2022 with “orchestrating” a global cryptocurrency Ponzi scam. In a court filing at the time, Richard Primoff, an attorney for the US Securities and Exchange Commission, stated that Kumbhani had moved from India to an unidentified address abroad.

    Modus Operandi

    In addition to running an unauthorised money transmission business and conspiring to commit international money laundering, Kumbhani was charged with conspiracy to commit wire fraud and price manipulation. Kumbhani asserted in 2016 that he had developed the BitConnect blockchain and started a lending operation with native tokens known as BitConnect Coins (BCC). According to reports, he tricked investors into funding his phoney cryptocurrency business by making unrealistically high returns. BitConnect’s market capitalisation peaked at $3.4 billion during its heyday.

    However, following cease-and-desist orders from North Carolina and Texas regulators, BitConnect shut down its exchange in January 2018. Glenn Arcaro, the director and promoter of BitConnect, entered a guilty plea in a federal court in September 2021 for his involvement in a large-scale conspiracy involving the cryptocurrency network.

    The most recent development coincides with certain significant controversies that have recently rocked the cryptocurrency industry. A security breach at the cryptocurrency exchange WazirX occurred in July of last year, resulting in the theft of $234 million worth of cryptocurrencies. In the meantime, in October of last year, Delhi Police and cryptocurrency exchange Binance teamed up to uncover a sophisticated scam run by a bogus organisation called “M/s Goldcoat Solar.” This resulted in several arrests and the confiscation of more than one lakh USDT in bitcoin assets.

    RBI Removes Restrictions on Online Customer Onboarding at Kotak Mahindra Bank
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  • ED Raids Flipkart and Amazon Merchants’ Offices

    A few sellers on Amazon and Walmart-owned Flipkart had their premises raided by the Enforcement Directorate (ED) on 7 November 2024 on suspicion of breaking the Prevention of Money Laundering Act (PMLA) and foreign investment standards.

    19 locations in New Delhi, Gurugram, Panchkula, Hyderabad, and Bengaluru were searched, according to official sources. According to various sources, among of the companies being investigated are Appario Retail, Shreyash Retail, Darshita Retail, and Ashiana Retail. This could not be independently confirmed, though.

    Why These Offices Have Been Raided?

    There have been accusations, according to sources, that these dealers have been importing goods from China by paying lower import taxes and rerouting them through other countries. Complaints about underinvoicing are also present. According to a media report, many vendors route their goods through other areas for quicker clearance because Chinese consignments are detained for extended periods of time at ports for security inspections. According to media sources, they might not be aware of all the facts because the searches were conducted on sellers rather than e-commerce companies.

    According to official sources, there have been multiple grievances from impacted parties alleging that e-commerce companies are favouring some sellers over others and even influencing product prices either directly or indirectly.

    Dos and Don’ts of FDI

    Companies like Flipkart and Amazon use the marketplace model since inventory-based e-commerce prohibits foreign direct investment (FDI). This indicates that they provide an online marketplace for vendors to sell their goods rather than maintaining their own stock. However, physical B2B stores run by Amazon and Flipkart also permit FDI. They sell goods to sellers through these businesses, and the vendors resell the goods on their platform.

    The government has implemented a few further restrictions to prevent any FDI violations. The marketplace platform, for example, is not permitted to own stock in seller entities. Additionally, no more than 25% of the products that vendors on their marketplace can source come from their B2B businesses. The merchants, not Flipkart or Amazon, must offer the discounts.

    According to official sources, ED examined documents from roughly six of these vendors and made copies of some of them. The Confederation of All India Traders (CAIT), meanwhile, applauded the ED’s move.

    CAIT and AIMRA Already Filled Petitioned to CCI

    The mainline mobile retailers’ group AIMRA and the CAIT had previously petitioned the CCI to immediately suspend Flipkart and Amazon’s operations, claiming that the companies were using predatory pricing and burning money to offer steep product discounts.

    This government is dedicated to making sure that the trading community cannot be harmed by anyone. CAIT Secretary General Praveen Khandelwal said, “We urge both the CCI and the ED to take swift action and prevent any further, irreparable damage to the businesses of small traders in response to multiple complaints filed by the trading community regarding FDI violations and the anti-competitive practices of quick-commerce companies such as Blinkit, Swiggy, and Zepto.”

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