New Delhi: U.S. e-commerce giant Amazon, which is allegedly investigating bribes paid by its legal representatives in India, spent a staggering Rs.8.546 billion, or $ 1.2 billion in legal costs, on maintaining a presence in the country over the 2018-20 period.
Sources familiar with the company’s public account filings said six units from 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 billion in 2018-19 and Rs 5.126 billion in 2019-20 in legal fees in India.
Amazon is involved in a lawsuit over the acquisition of Future Group and is facing an investigation by the Indian Competition Commission (CCI).
While the company refused to comment on the legal fees issue, trade organization CAIT claimed that Amazon spends 20% of its revenue on lawyers.
“The enormous amount spent on legal fees clearly shows how Amazon and its subsidiaries are using their financial power to bribe and manipulate Indian government officials,” wrote CAIT General Secretary Praveen Khandelwal to Minister of Commerce Piyush Goyal.
Without providing any evidence to support his claim, he requested a CBI investigation.
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A Morning Context report on Monday said that Amazon had launched an investigation into some of its legal representatives for allegedly bribing Indian government officials. The Senior Corporate Counsel has reportedly been on leave on the matter.
The company had stated that it takes allegations of improper conduct seriously and investigates them thoroughly in order to take appropriate action. Although Amazon neither confirmed nor denied the allegations, Amazon had said it had “zero tolerance for corruption”.
“What company around the world that spends more than 20 percent of its accrued income on payments to lawyers can keep in business and even make losses year after year, but yes, it is global e-tailer Amazon in India that does a living example of this insane sharpness, “claimed CAIT on Tuesday.
Khandelwal claimed in a statement that in two years (2018-20) Amazon will pay approximately “Rs 8,500 billion in legal and legal fees on sales of approximately Rs 45,000 billion.
Amazon is also facing an investigation by India’s fair trade observer CCI into alleged anti-competitive practices, predatory pricing and preferential treatment for sellers.
The US-based company has also dealt legally with the Future Group. Amazon denies a Rs 24,713 billion deal between Future Group and Reliance Retail Ventures Ltd and has dragged the Future Group into the Singapore International Arbitration Center (SIAC). It has argued that Future violated the contract by closing the deal with rival Reliance.
Amazon and the Future Group had also filed lawsuits 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.