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ED summons Amazon India, Future Group officials in FEMA violation probe

Sources said the officials of these companies have been asked to appear with the documents next week.

ED summons Amazon India, Future Group officials in FEMA violation probe
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New Delhi, First Published Nov 28, 2021, 6:08 PM IST
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The Enforcement Directorate has summoned senior executives of Amazon India and Future Group in connection with the violation of the Foreign Exchange Management Act. The officials who have been summoned include Amit Agarwal, country head of Amazon India. The officials have been asked to appear by the central agency with regard to a probe into the disputed deal between the two groups. 

The agency is investigating whether Amazon was in violation of the provisions of the Foreign Exchange Management Act when it picked up a 49 per cent stake in Future Coupons Pvt Ltd in 2019. FCPL has a 10 per cent stake in Future Retail, which operates Big Bazaar, Food Bazaar and Easyday retail stores.

Sources said the officials of these companies have been asked to appear with the documents next week. The Commerce Ministry had asked the ED to take necessary steps for multi-brand retail business against major e-commerce companies like Amazon and Flipkart. 

Besides this, the Delhi High Court also made strong observations about Amazon. After this, the ED started an investigation under various sections of FEMA. The High Court had held that American firm Amazon attempted to gain control of Future Retail through certain agreements with the non-listed arm of Future Group. This will be considered a violation of FEMA and Foreign Direct Investment rules. 

ED sources said that officials of both these firms have been summoned to take the probe forward. An Amazon spokesperson, confirming the receipt of the summons, said that the company is reviewing it and will take necessary steps within the stipulated time. Future Group, meanwhile, did not comment on this. Both firms have been locked in a legal battle over the possible sale of Future Retail. Amazon has contended that its agreement to sell Future Retail to Reliance Retail violates the 2019 investment agreement with Reliance Retail.

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