- Wednesday, April 24, 2024
By: Shubham Ghosh
US E-COMMERCE giant Amazon, which is said to be probing alleged bribes paid by its legal representatives in India, spent Rs 8,546 crore (£848 million) in legal expenses for maintaining its presence in the country during 2018-20, sources said.
According to the sources aware of the firm’s public account filings, entities of the company, including 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, paid in India towards legal fees Rs 3,420 crore during 2018-19 and Rs 5,126 crore during 2019-20.
The e-commerce giant is locked in a legal tussle over the takeover of Future Group and is facing a probe by the country’s fair-trade watchdog Competition Commission of India (CCI).
While Amazon refused to comment on the legal fee issue, traders’ body Confederation of All India Traders (CAIT) said that it spending 20 per cent of its revenues 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 Indian commerce minister Piyush Goyal. He also demanded a CBI inquiry but did not offer any proof for his claim.
On Monday (20), a report by The Morning Context said 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. Amazon said 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”.
“We have zero tolerance for corruption. We take allegations of improper actions seriously, investigate them fully, and take appropriate action. We are not commenting on specific allegations or the status of any investigation at this time,” an Amazon spokesperson was quoted as saying by news agency Press Trust of India.
The Indian government also has said that it has “zero tolerance towards corruption of any kind”.
Officials in the government said while taking a dig at Amazon, “Amazon has been spending more than ₹ 8,500 crore (£844 million) in legal fees. It’s time to think where all it is going. The whole system seems to work on bribes and that is not the best of business practices,” India’s NDTV news channel reported. The government said allegations that Amazon’s legal representatives bribed Indians officials will be investigated, the channel added.
“Which company over the globe while spending more than 20 per cent 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,” CAIT said on Tuesday (21).
Khandelwal in a statement claimed that Amazon has spent about “Rs 8,500 crore (£844 million) on legal and professional fees against a turnover of about Rs 45,000 crore (£4.4 billion) in two years (2018-20)”.
Amazon also faces a probe by 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 (£2.4 billion) deal between Future Group and Reliance Retail Ventures Ltd and has dragged Future Group to the Singapore International Arbitration Centre. 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. The US firm is an investor in Future Coupons, which is a shareholder in Future Retail Ltd.
