Amazon has launched an investigation into bribery-related allegations against some of its representatives in India.
The US e-commerce giant ordered a probe following a complaint from a whistleblower who alleged that one or more of the company’s legal representatives had misused money allocated to legal fees, instead using it to bribe government officials, as reported by an Indian news and analysis outlet The Morning Context. The publication also reported that Amazon’s senior counsel has been sent on leave.
Amazon claimed it will thoroughly investigate the allegations. Its spokesperson said: “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.”
The development comes at a time when Amazon is facing a probe by the fair trade watchdog, Competition Commission of India, for alleged anti-competitive practices, predatory pricing and preferential treatment of sellers. It is also accused of circumventing India’s foreign investment rules for e-commerce companies.
For Amazon, India is one of the key overseas markets after it shut down its operations in China in 2019, having lost out to local players such as Alibaba and JD.com. It has so far invested over $6.5 billion in India and expanded its footprint to multiple categories in recent years. The group competes with Walmart-owned Flipkart and Reliance JioMart, promoted by India’s richest man, Mukesh Ambani.
The e-commerce giant is also locked in a legal battle with Indian brick-and-mortar retailer Future Group, which wants to sell a major chunk of its assets to Reliance Group for 250 billion rupees (US$3.4 billion).
Amazon had acquired a 49% stake in Future Coupons in 2019 and by virtue of that obtained a small stake in Future Retail. This deal gave Amazon the first right of refusal during a stake sale. There is also a non-compete clause that prevents Future Group from approaching Amazon’s competitors including Reliance Group.
Amazon had initially consulted the Singapore International Arbitration Centre on the issue and the ruling was in its favor. Later both the parties filed litigations in Indian courts, including the Supreme Court, on the issue.
Future Group faced a severe cash crunch after the Indian Government last year imposed lockdowns and curbs to prevent the spread of Covid-19. It had to keep its over 1,700 outlets shut for months. The group’s founder and CEO, Kishore Biyani, had earlier claimed that the company approached Amazon eight times seeking help, but the e-commerce giant did not oblige. Amazon denied the claim and said it had held discussions with partners and the promoters of Future Group to find a solution.