Amazon India Says It Will Investigate Bribery Charges, Trade Body Calls CBI Investigation
The Indian branch of the world’s largest online retailer Amazon has launched an internal investigation into the conduct of its legal team after being accused of bribery.
It was alleged that the legal fees paid by the company were used to bribe officials at various levels across the country.
Key government sources said financial statements filed by the company show legal fees paid by six Amazon companies between two fiscal years – 2018-19 and 2019-2020 – virtually equivalent to 20.3% of total revenue. declared.
AMAZON WANTS TO INVESTIGATE THE MATTER
Amazon has pledged to internally investigate corruption charges involving the six companies, which allegedly paid Rs 8,456 crore in legal fees out of total revenue of Rs 42,085 crore in 2018-19 and 2019-2020 .
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Financial statements filed by six Amazon companies show that the maximum amount of legal fees – compared to revenue data – was paid by Amazon Seller Services Private Limited based in Bengaluru.
In 2018-19 and 2019-2020, Rs 1,448 crore and Rs 1,969 crore were paid as legal fees on the company’s income of Rs 7,800 crore and Rs 11,000 crore, respectively.
AMAZON LEGAL COSTS VS REVENUES
The financial statements also show similar high expenses incurred for legal advice paid by other Amazon companies.
On Monday, an Amazon spokesperson said the matter was under internal investigation.
The spokesperson said: “We have zero tolerance for corruption, and we take allegations of improper actions seriously, investigate them thoroughly and take appropriate action.”
On the issue of the high legal fees paid to pay bribes revealed by a whistleblower, the spokesperson said: “We are not commenting on specific allegations or the status of an investigation at this time. “
Sources have confirmed that the retail giant is investigating whether the legal fees it funds were used to bribe government officials. According to sources, Amazon has asked one of its senior legal advisers to go on leave as part of its internal investigation.
THE GOVERNMENT MONITORS THE EXPENSES
Government sources who spoke to India Today TV said that there is a zero tolerance policy towards any kind of corruption.
“From the report, it is not clear when and in what state this alleged act took place. However, documents show Amazon spent more than 8,500 crore in legal fees. It’s time to think about where this is all going, because that doesn’t seem like the best business practice, ”a source said.
INDIAN TRADERS LOOKING FOR CBI PROBE
The accusations brought by the whistleblower and the internal investigation into corruption add to Amazon’s concerns in the country.
Some Indian trade bodies have openly challenged the global giant and its business practices that threaten the survival of small local retailers.
The Confederation of All Indian Traders (CAIT), which represents 70 million traders, wrote a letter to Commerce Minister Piyush Goyal asking for a CBI investigation into the issue of legal fees.
Speaking to India Today TV, CAIT Secretary General Praveen Khandelwal said: “The government needs to take a deep look at the issue of the legal fees used by Amazon to pay bribes as it calls into question the credibility of the government and its officials. In addition, the government must protect the Indian e-commerce and retail market from undue influence, abuse of dominance and collusion with government officials who fall under anti-corruption law ”,
CAIT Chairman BC Bharti said, “This (Amazon internal investigation) concerns Amazon’s self-admission for bribery of officials, the above steps are essential to protect the Indian e-commerce market and retail trade against undue influence, abuse of dominance and collusion with government officials who fall under anti-corruption law.
PROBLEM WITH INCREASING COMPETITION
India’s e-commerce market, valued at over $ 1,000 billion, is increasingly crowded and Amazon is facing daunting challenges from Flipkart, Tatas and Reliance JioMart. The company has already committed more than $ 6 billion for the expansion of its business in India.
However, the new controversy risks hurting his future goals in the country as he could face more heat from the government. The new accusation against Amazon came after a Reuters report in February cited internal documents indicating that Amazon had bypassed Indian FDI in e-commerce.
He also pointed out that Amazon gave preferential treatment to a small group of sellers on its Indian platform and masked its links with sellers to use them to flout foreign investment rules for e-commerce.
Amazon is already facing an antitrust investigation in India. In August, Amazon suffered a legal setback when the Supreme Court refused to interfere with the Karnataka High Court order supporting an Indian Competition Commission (ICC) investigation against Amazon and Flipkart for alleged anti-competitive practices. .
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