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Delhi HC to Hear in January Amazon’s Plea Challenging ED’s Probe into Foreign Exchange Violation

New Delhi: The Delhi High Court on Thursday said it will hear in January a plea by Amazon challenging the jurisdiction of the Enforcement Directorate to investigate matters which are beyond its scope under the Foreign Exchange Management Act (FEMA). The plea was listed before Justice Rekha Palli who did not hold court, and the matter is now listed for hearing on January 5.

Petitioners Amazon Wholesale (India) Pvt Ltd and Amazon Seller Services Pvt Ltd challenged the jurisdiction of the Enforcement Directorate (ED) and its officers to investigate Amazon Wholesale (India) Pvt Ltd in matters that are beyond the scope of power and remit of the agency under the FEMA. Last month, Amazon had said it was in receipt of summons by the ED in connection with its deal with the Future Group.

The plea said the two companies — Amazon Wholesale (India) Pvt Ltd and Amazon Seller Services Pvt Ltd — are Indian resident entities and are challenging the investigation as it pertains to transactions that have no foreign exchange element. It said the ED had issued a directive on February 19 this year and is conducting a “fishing and roving” investigation against Amazon Wholesale and subjecting the petitioners to proceedings without any legal basis or jurisdiction. This is causing unnecessary harassment despite their full cooperation, the plea said.

Various summons and emails have been issued to employees of Amazon Seller Services for a transaction which is completely unconnected with them, and seeking from them legal advice and privileged legal opinions that have been received from time to time by Indian subsidiaries of Amazon.com, it said The petition sought a direction to the ED to forthwith withdraw or cancel the February 2021 directive and all summons or proceedings commenced by the agency. It further sought from the court to direct the probe agency not to conduct “fishing and roving” enquiry on matters covered by legal privilege and ask for information falling outside the purview of FEMA.

Amazon and Future Group have been battling it out in courts after the Kishore Biyani-led group in August last year agreed to sell its assets to billionaire Mukesh Ambani’s Reliance Retail on a slump sale basis for Rs 24,500 crore. Amazon is objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008 and is engaged in the business of marketing and distribution of gift cards, loyalty cards, and other reward programmes to corporate customers.

Amazon had approached the Singapore International Arbitration Centre (SIAC) as well as in Indian courts. Last week, the Competition Commission of India (CCI) suspended its more than two-year-old approval for Amazon’s deal to acquire a stake in Future Coupons Pvt Ltd, and also imposed a Rs 202 crore penalty on the e-commerce major for certain contraventions.

(Disclaimer: Network18 and TV18 – the companies that operate news18.com – are controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary)

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