Amazon bribery: CAIT claims Amazon spending 20% of its revenue on lawyers is questionable
US e-commerce giant Amazon, which is said to be investigating allegations of bribery in India paid by its legal representatives in India, spent a staggering Rs.8,546 crore or USD 1.2 billion in legal expenses for maintaining a presence in the country during 2018-20. Indian investigating agencies started the probe after the revelations by a whistleblower in the United States found that Amazon’s account filings show six entities of Amazon – Amazon India Ltd (Holding Company), Amazon Retail India Pvt Ltd, Amazon Seller Services Pvt Ltd, Amazon Transportation Services Pvt Ltd, Amazon Wholesale (India) Pvt Ltd, and Amazon Internet Services Pvt Ltd (AWS) – paid Rs.3,420 crore in India during 2018-19 and Rs.5,126 crore during 2019-20 towards legal fees.
Amazon is locked in a legal tussle over the takeover of Future Group and is facing a probe by the Competition Commission of India (CCI). While the company declined to comment on the legal fee issue, traders body CAIT claimed that Amazon spending 20 percent of its revenue on lawyers was questionable. “The whopping amount spent under legal professional fees clearly shows how Amazon and its subsidiaries are misusing their financial muscles to bribe and manipulate Indian government officials,” CAIT National Secretary General Praveen Khandelwal wrote to Commerce Minister Piyush Goyal.
Amazon also faces a probe by India’s fair trade watchdog CCI for alleged anti-competitive practices, predatory pricing, and preferential treatment of sellers.
“Which company over the globe while spending more than 20% of its accrued revenue on paying to lawyers is able to sustain in business and that too even making losses year by year but yes it is global e-tailer Amazon in India which is a living example of this mind-boggling acrimony,” said the Confederation of All India Traders (CAIT). CAIT National President B C Bhartia & Secretary General Praveen Khandelwal said that Amazon has spent about Rs.8500 crores on legal & professional fees against a turnover of about Rs.45, 000 crores in two years i.e 2019 & 2020. They said that charges of a whistleblower of paying bribes to government officials in India through lawyer stand corroborated.
On Monday, a report by Morning Context stated that Amazon has initiated an investigation against some of its legal representatives for allegedly bribing Indian government officials. Its senior corporate counsel has reportedly been sent on leave in this matter. The company had stated that it takes allegations of improper actions seriously and investigates them fully to take appropriate action. While it did not confirm or deny the allegations, Amazon had said it has “zero tolerance for corruption”.
Amazon also faces a probe by India’s fair trade watchdog CCI for alleged anti-competitive practices, predatory pricing, and preferential treatment of sellers. The US-based firm has also locked in a legal tussle with Future Group. Amazon is contesting a Rs.24,713-crore deal between Future Group and Reliance Retail Ventures Ltd and has dragged Future Group to the Singapore International Arbitration Centre (SIAC). It has argued that Future violated the contract by entering into the deal with rival Reliance. Amazon and Future Group had also filed litigations in Indian courts, including the Supreme Court, on the issue. Amazon is an investor in Future Coupons, which in turn is a shareholder in Future Retail Ltd.
The CAIT alleged Amazon for managing the government officers under the garb of legal professional services which requires immediate investigation by CBI since the dignity of the country is at stake. The CAIT leaders while releasing a table of Amazon paying legal fees in past years in its communication to Commerce Minister Piyush Goyal said that the misuse of legal funds by Amazon are amazing and whopping and thrash all principle of the economic viability of any company.
 Amazon whistleblower alleges India lawyers bribed officials – Sep 20, 2021, The Morning Context
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