Weekly News Wrap: India enforcement warns Flipkart of possible $1.35b fine; China mulls $1b antitrust fine on Meituan

And Bukalapak’s shares jumped nearly 25% on trading debut.

From Reuters

India's financial-crime agency has asked Walmart's Flipkart and its founders to explain why they shouldn't face a penalty of $1.35b for alleged violation of foreign investment laws, three sources and an agency official told Reuters.

The Enforcement Directorate agency has been investigating Flipkart and Amazon for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

The Enforcement Directorate official said the case concerned an investigation into allegations that Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was prohibited under law.

A so-called "show cause notice" was issued in early July by the agency's office in southern city of Chennai to Flipkart, its founders Sachin Bansal and Binny Bansal as well as current investor Tiger Global, to explain why they should not face a fine of $1.35b (INR100b) for the lapses, said the agency official and the sources.

A Flipkart spokesperson said the company is "in compliance with Indian laws and regulations".

Read more here.

From Bloomberg

China plans to levy a roughly $1b fine on Meituan for abusing its market position as antitrust regulators wrap up a four-month-old investigation into the food delivery giant, according to a person with knowledge of the matter.

The State Administration for Market Regulation could announce the penalty in coming weeks and the figure could still change ahead of the final decision, the person said, asking not to be identified discussing private deliberations.

The company will be required to revamp its operations and end its exclusivity arrangements with merchants known as “pick one from two,” the person added. The Wall Street Journal earlier reported the potential fine.

The antitrust watchdog had announced an investigation into the company in April, weeks after slapping a record $2.8b fine on fellow internet giant Alibaba for abusing its market dominance.

Read more here.

From CNBC

Shares of Indonesian e-commerce firm Bukalapak jumped nearly 25% in their trading debut, from an initial public offering (IPO) price of $0.059 (IDR850) to $0.073 (IDR1,060).

As investors piled into the IPO, the sharp jump in share price triggered the Indonesia Stock Exchange’s auto rejection mechanism. The function rejects further increases in share price once the stock hits the upper limit. Stocks priced between 200 rupiah and 5,000 rupiah are allowed to rise as much as 25%.

Reports said the e-commerce firm raised $1.5b in Indonesia’s largest IPO, and the company is valued at $6b.

Read more here.