New Delhi: The Enforcement Directorate has begun a comprehensive probe against a dozen popular online retail firms in the country for alleged violations of foreign direct investment rules in their e-commerce businesses.
The agency, according to sources, has received a communication from the country’s banking regulator the Reserve Bank of India regarding a few firms, while it has took up the rest casessuo-motofor probe under the provisions of the Foreign Exchange Management Act.
A special team of officials of the central probe agency, sources said, is working to study the business operations of these firms which have thronged the online retail marketplace in the last few years.
The sources declined to reveal the identity of the companies under the scanner as the investigations are at a preliminary stage.
According to an official note, close to a dozen firms are under the scanner of the agency.
There are allegations that the companies have violated the Foreign Direct Investment (FDI) norms of e-commerce sector.
As per the current policy, FDI is not allowed in domestic e-commerce companies conducting B2C (business-to-consumer) transactions while 100 per cent foreign investment is permitted in B2B (business-to-business).
A slew of fund raising and foray of foreign-based investors in these domestic companies has prompted the enforcement wing of the finance ministry to look into their operations, the sources said. The probe period for investigating the FDI contributions of these firms under the scanner is before April 2013.
