ED Probes Myntra and SIMPL for Alleged FEMA and FDI Violations Exceeding ₹2,500 Crore

The Directorate of Enforcement (ED) has launched formal investigations into e-commerce giant Myntra Designs Private Limited and financial technology company One Sigma Technologies Pvt. Ltd. (operator of SIMPL) for alleged violations of the Foreign Exchange Management Act (FEMA) involving a combined total of over ₹2,500 crore.

Myntra Under Scrutiny for FDI Structure

According to the ED, Myntra is accused of bypassing India’s strict Foreign Direct Investment (FDI) regulations that apply to retail trade. The company reportedly declared its business as wholesale cash and carry to qualify for FDI, but then sold nearly all goods to Vector E-commerce Pvt. Ltd., a group affiliate, which subsequently retailed those products to consumers. Under the FDI policy, wholesale businesses are restricted from selling more than 25% of their goods to related or group companies—an alleged cap that Myntra far exceeded. The ED claims this approach resulted in multi-brand retail activity “disguised” as wholesale trade, flouting the regulations and leading to suspected FEMA violations amounting to ₹1,654 crore.

Myntra has responded, asserting its commitment to full legal compliance and stating its willingness to cooperate with authorities. The company added that it has not yet received formal documents regarding the ED’s probe.

SIMPL (One Sigma Technologies) Investigated Over Foreign Investment

In a related development, SIMPL—run by One Sigma Technologies—has come under ED investigation for reportedly receiving unauthorized FDI and issuing convertible notes worth a total of ₹913.75 crore. The company allegedly classified itself as an IT services provider to receive these investments under the automatic route, even though its core business involves providing financial services. As per FDI rules, foreign investment in financial services requires explicit government approval rather than the automatic route, which SIMPL allegedly sidestepped. Most funds in question originated from the United States.