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Govt may investigate Amazon bribery charges

India may investigate allegations that lawyers representing Amazon bribed officials, provided there is some evidence to that effect, two government officials said, asking not to be named
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Published on Sep 20, 2021 11:58 PM IST
By HT Correspondent, New Delhi

India may investigate allegations that lawyers representing Amazon bribed officials, provided there is some evidence to that effect, two government officials said, asking not to be named.

The officials were reacting to a report published on Monday by the website The Morning Context, which said the US-headquartered e-commerce firm had opened an investigation after a whistleblower said lawyers associated with the company bribed officials. “The online retailer is looking into the conduct of its legal representatives in India after allegations of corruption come to light,” the report said.

Reacting to the report, Amazon India on Monday said it has zero tolerance for corruption, and it takes appropriate action against any such practice after an investigation. “We have zero tolerance for corruption. We take allegations of improper actions seriously, investigate them fully, and take appropriate action,” a spokesperson said when asked to comment on the report, without offering details. “We are not commenting on specific allegations or the status of any investigation at this time.”

The whistleblower pointed to the role of an independent lawyer hired by the company, The Morning Context report said, citing unnamed people aware of the matter. The legal fees paid to the lawyer was in part “funnelled into bribing government officials”, the report said, citing the whistleblower. A senior corporate counsel at Amazon’s in-house legal team has been suspended, the website reported.

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The government is yet to receive any information or formal complaint on the matter, one of the government officials said. “Even the news report does not provide any specific detail about the alleged bribe, such as which era, which state, and who were the recipients of illegal gratification,” the official pointed out.

The involvement of the central government on operational matters is minimal, as its job is to frame policy and rules, the official said, explaining that the actual business activities, such as warehousing, take place in the states.

The government will certainly take action against any corporate entity indulging in any illegal activity as per the law of the land, but action will have to be based on facts and not media reports, the official added.

The government is aware of unconfirmed reports and appropriate agencies may take up the matter after ascertaining facts, a second official said. There are reports that Amazon has been spending more than 2,000 crore in legal fees. “It’s time to think where all of this is going,” the official said.

The Foreign Corrupt Practices Act (FCPA) of the US is stringent on such matters, according to an industry expert who has been engaged by a US firm. The law prohibits American firms and individuals from paying bribes to foreign officials, and prominent instances involving its violation have in the past led to settlements running into hundreds of millions of dollars. The expert requested anonymity.

The Confederation of All India Traders (CAIT), which represent about 70 million domestic retail stores, said it will approach Gary Genseter, chairman, the US Securities & Exchange Commission (SEC), which is the repository body of FCPA, and also the corporate governance committee of Amazon Board, demanding a “fair and independent probe” into the matter.

The lobby group has written to Union commerce minister Piyush Goyal, urging him to institute an enquiry by the Central Bureau of Investigation.

The latest allegations add to the legal problems Amazon has faced in India. These include a bruising fight with Future Retail after the latter signed a deal with a Reliance Industries subsidiary, a Competition Commission of India investigation into alleged collusion between Amazon and its principal e-commerce rival Flipkart, and even police complaints that were filed relating to shows on Amazon’s Prime Video platform.

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