Jewelery brand Caratlane will challenge ED’s notice: Alleged violation of FEMA rules, company said – took funds under rules

Online jewelery retail brand Caratlane is preparing to challenge the ED’s show cause notice. According to reports, the company is alleged to have violated the rules of Foreign Exchange Management Act (FEMA) between 2011 and 2014 for taking Foreign Direct Investment (FDI).

ED had issued notice in this matter on 28 March 2022. About one and a half years after the notice was issued, the company is preparing to challenge it. The company said that it has taken funds from abroad as per the rules.

These are the allegations of ED on the company

The ED alleges that Caratlane took investments from a company named Tiger Global between 2011 and 2014. At that time, single-brand retail was not allowed to take such funds.

The company said – FDI taken under the rules

Caratlane said on ED’s allegations that FDI in multi-brand retail was banned in India till 2011 when it took FDI. However, foreign investment was permitted up to 51% in single brand retail. Then after 20 September 2012, the FDI rules were amended. In which 51% FDI was also allowed for multi-brand retail with certain conditions. While our company does retail business. Therefore, no rule has been violated in taking foreign investment.