Amazon has initiated an investigation into the conduct of its legal representatives in India, The Morning Context reported. This investigation comes on the back of a whistleblower complaint alleging that certain monies paid by Amazon in legal fees have been funneled into bribes by one or more of its legal representatives.
Two people who work closely with Amazon's in-house legal team confirmed to the publication that Rahul Sundaram, senior corporate counsel at Amazon, has been sent on leave. The report said most American companies take such whistleblower complaints seriously because it is against the Foreign Corrupt Practices Act or FCPA. The FCPA is a US law that prohibits firms and individuals from paying bribes to foreign government officials to assist in obtaining or retaining business. Adherence to the FCPA is also part of the corporate governance rules governing all public companies.
The report said earlier this year, a whistleblower inside Amazon flagged issues of bribery in the Indian operations, which resulted in the internal investigation. The report stated that the whistleblower's complaint pointed to the role played by an independent advocate in New Delhi who works with Amazon as an outside counsel for hire and that legal fees paid to this advocate were allegedly funneled into bribing government officials. It added that the said advocate's billings were over Rs 20 crore yearly.
The US e-commerce giant on Monday said it takes allegations of improper actions seriously and investigates them fully to take appropriate action. Without confirming or denying allegations, Amazon said it has "zero tolerance for corruption".
An Amazon 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 fair trade watchdog, Competition Commission of India (CCI), for alleged anti-competitive practices, predatory pricing, and preferential treatment of sellers.
Amazon is also locked in a legal tussle with Future Group. Amazon is contesting the Rs 24,713-crore deal between Future Group and Reliance Retail Ventures Ltd and has dragged Future Group to the Singapore International Arbitration Centre (SIAC). It has been 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.
Amazon is an investor in Future Coupons, which in turn is a shareholder in Future Retail Ltd.
With inputs from agencies