Amazon Bribery: Amazon accounts show Rs 8,546 crore (USD 1.2 Billion) spent in India for legal expenses during 2018-20

If CAIT’s allegations are correct, Amazon spent fully 20 percent of its revenues on lawyers who were bribing various govt. officials

If CAIT’s allegations are correct, Amazon spent fully 20 percent of its revenues on lawyers who were bribing various govt. officials
If CAIT’s allegations are correct, Amazon spent fully 20 percent of its revenues on lawyers who were bribing various govt. officials

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”.[1]

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.

Earlier CAIT accused Infosys mentor Narayan Murthy of lobbying for Amazon in India. The traders’ body said that Murthy-linked firm CloudTail is the major vendor of Amazon in India.[2]

References:

[1] Amazon whistleblower alleges India lawyers bribed officialsSep 20, 2021, The Morning Context

[2] Indian Traders Association accuses Infosys Narayan Murthy for helping Amazon’s malpractices in India. Alleges Murthy’s Cloudtail is the biggest vendor of AmazonFeb 19, 2021, PGurus.com

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2 COMMENTS

  1. Amazon Six entities in India story remind me for instance six entities floated by Deloitte. It is common in India post L P G in 1991. Amazon’s Rs.8546 Crore spends during 2018-19 and 2019-20 needs thorough probe but under the present incumbent government lead by a national party with clandestine support from the previous government lead by another national party serious probe won’t happen at all. Both parties scratch each other’s backs and white washes massive NPAs while Dr.S.Swamy waits for legal battle only to be watered down with less staff in probing agencies and GOI attorney general /his assistant keeps on asking for adjournments or sees that the case won’t come for hearing at all and Covid19 granted them another cover-up!

    Investigation means nothing in India duly supported by rotten judicial system with scores of Law Firms floated in the country duly supported by newspaper barons and TV channels to suppress the truth and news!

    Further it is noticed over seven years that it is next to impossible to guess the moves and or the motives of this government all traditional household names in the form of experts/ intelligentsia have been just reduced to mortuary attendants and just spectators doing more of the post-mortem analysis with a confused moderator/anchor/ reporters on TV channels or on YouTube!

    The present incumbent government proved that experts with or without academic doctoral degrees and three decades of experience are not needed for good governance and only one man knows everything and takes the decision and others have to follow.

    Amazon’s Rs.8546 Crore spends is mind boggling and reveals how big companies can destabilize a nation and its institutions and change the government as happened in USA during Nov 2020 to Jan 2021.

  2. It is very crucial that Amazon is probed – it appears that they have a few points to clarify as to what the so called lawyers – legeal services – paid so much far; In india most of the bribes happen thru secondary expenses such as fully invited and paid visits, gifts and all these done by the agents – like lawyers – in fact if we probe the lawyers and their spendings then the game will be up.. will NaMo & team start on this!!!! i wonder NOT

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