The Enforcement Directorate (ED) has issued a show-cause notice of nearly Rs 10,600 crore to Walmart-owned e-commerce major Flipkart and its promoters for alleged violation of the foreign exchange law.

The notice under various sections of the Foreign Exchange Management Act (FEMA) was issued last month to 10 persons, including Flipkart, its founders Sachin Bansal and Binny Bansal, among others, sources said.

The notice followed completion of investigation and the charges include violation of the foreign direct investment (FDI) rules as also regulations relating to multi-brand retail in India. The company and its executives will now face adjudication that will be conducted by a special director-rank officer of the agency based in Chennai, they said.

Proceedings under the FEMA are civil in nature and the final penalty, post adjudication, can be at least three times the amount contravened under the law.

Asserting that it was cooperating with the ED in this investigation, a spokesperson of the e-commerce giant said, "Flipkart is in compliance with Indian laws and regulations, including FDI regulations. We will co-operate with the authorities as they look at this issue pertaining to the period 2009-2015 as per their notice."

The case of alleged FDI rules violation against Flipkart has been under the ED scanner since 2012 and the agency has found alleged violations of the FEMA, including an instance of transfer and issue of security to a person or entity outside India.

Flipkart competes with Amazon and Reliance JioMart in the Indian e-commerce space and has recorded significant business growth over the last few years.

In 2018, US-based retail giant Walmart Inc had picked a 77 per cent stake in Flipkart for USD 16 billion. Its founders and many of its investors took either a partial or complete exit following the acquisition of major shares of the company.

In July this year, Flipkart Group had announced raising USD 3.6 billion (about Rs 26,805.6 crore) in funding led by GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2, and Walmart, pegging the value of the e-commerce platform at USD 37.6 billion.