The murky case of bribery, allegedly on behalf of Amazon, has many unanswered questions

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The murky case of bribery, allegedly on behalf of Amazon, has many unanswered questions
  • A whistleblower, reportedly, within the company highlighted that Amazon’s legal representatives were bribing Indian officials.
  • The whistleblower named Amazon’s senior corporate counsel and New Delhi-based independent legal counsel in this matter.
  • The independent lawyer has now claimed that he never worked with Amazon directly, but with corporate law firm AZB Partners.
  • The questions are who paid the bribe, to whom and for what, and who is authorised to ask this question and who is accountable to answer it.
Amazon has reportedly initiated an investigation against its legal representatives for allegedly bribing Indian government officials. The development came to light early last week, after a whistleblower, reportedly, at the ecommerce platform reported that few such representatives were funneling money paid by Amazon to bribe Indian officials.

The said whistleblower had reportedly named Rahul Sundaram, senior corporate counsel at Amazon, and Vikas Chopra, an independent counsel based out of New Delhi, in his complaint. According to a report by The Morning Context, Sundaram has been sent on leave while Amazon conducts an internal investigation.

Chopra, on the other hand, has claimed that he never really worked with Amazon directly. Instead, he was hired by corporate law firm AZB & Partners to handle Amazon-related legal work on its behalf. However, it’s still not clear on the sort of tasks Chopra was handling.

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That leaves us with a few questions: who paid the bribe, to whom and for what, and who is authorised to ask this question and who is accountable to answer it.

Will this make matters worse for Amazon?

The Indian government and several authorities — Competition Commission of India (CCI), Enforcement Directorate (ED) and others — have already been investigating Amazon’s ecommerce operation in India for alleged malpractices that hurt small retailers on its platform, and outside, as well as for allegedly flouting the country’s foriegn direct investment (FDI) policy.

It’s well within the government’s right to take up cognisance of this matter based on media reports. Well, that’s what it did when the Reuters report said that Amazon had been tip-toeing around India’s FDI policies and fudging numbers.
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The murky case of bribery, allegedly on behalf of Amazon, has many unanswered questions
BI India

“Any allegations of this kind of serious nature — unless backed up with concrete and verifiable evidence — may not be taken seriously. There are several forums where such allegations could be sent, besides CCI, who would be legitimately concerned with such investigations,” Dhanendra Kumar, first Chair of Competition Commission of India (CCI), told Business Insider.

Indus Law’s founding partner Avimukt Dar noted that bribing Indian public servants is an offence under prevention of corruption act and should be investigated by Indian law enforcement. The government and authorities like the police, Anti Corruption Bureau (ACB), Central Bureau of Investigation (CBI) and ED can take up the matter based on media reports. This statement was not in relation to the ongoing Amazon issue.

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Business Insider has reached out to Amazon seeking details about their internal investigation. The article will be updated with their response, if any.

Is Amazon aware of the alleged bribery?

This is what we know so far.

The New Delhi-based independent counsel Chopra sent a legal notice to the Morning Context, which first reported the development. In the notice, he mentioned that his fee bills are raised to AZB & Partners and not Amazon. Meaning, he was working in association with the said law firm and not Amazon directly.
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The murky case of bribery, allegedly on behalf of Amazon, has many unanswered questions
The Morning Context

Business Insider reached out to Chopra seeking confirmation on the content of the legal notice as well as his comments on the issue.

While he did not yet confirm the content of the said notice, he told Business Insider, “Matter is going before court and I don’t want to comment. But just would like to give one assurance that whosoever is pursuing this false and baseless news about me will have to face legal action and I will ensure that the legal action is taken to its logical conclusion so that person should understand that freedom of speech comes with reasonable restrictions. It’s very easy to take law into hands by publishing anything for vested interest. I know who all are behind these false news. God will take care. Thanks.”

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Business Insider has written to AZB Partners seeking comments and clarification.

Separately, Dar noted that it is possible for a legal consultant — independent or firm — to funnel the payments for such practices, without the knowledge of the client involved. Generally, it is added as the fee paid to the consultant, as no one can really add this as an expense.

“So the best way to see is if the same lawyer/law firm charged, let's say, ₹100 for a similar mandate last year and is now charging ₹1,000 — that should raise a red flag for the financial controller,” he added, without commenting on the specification in this particular matter related to Amazon.

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Is Amazon up to date with due diligence?

The approach in such a matter should be that the client — whoever it may be — should suspend or send the person named in complaint on leave, Dar added. The company should also do an inquiry in such matters and suspend working with the said law firm until the inquiry clears them.

So far, Amazon has followed such an approach by sending its senior corporate counsel on leave and by conducting the internal investigation. Notably, American companies like Amazon take such whistleblower complaints seriously as it is against the Foreign Corrupt Practices Act, or FCPA.

The FCPA law in the US prohibits companies and individuals from paying bribes to foreign government officials in order to retain or obtain business. This is also a part of corporate governance rules for all public companies in the US.
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The question is whether any authority in India is going to ask the same question to those accountable to answer it.

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