Paid just Rs 52 crore in legal fees in FY 2020, says Amazon

#Amazon, #Future Group, #Legal

The investigation is being done following a whistleblower complaint alleging that money paid for legal fees was funnelled into bribes by Amazon’s legal representatives.

Amazon which has been embroiled in multiple court cases in India claims to have paid just Rs 52 crore during the financial year ending March 2020 in legal fees contrary to multiple media reports in the last few days.

Conventionally legal fees could include litigation charges, consultation fee paid to law firms which have a retainer relationship with companies, and land procurements, among other things.

The US-headquartered firm also said that overall under the header of legal and professional expenses, it spent Rs 1,967 crore during the financial year under review. Now, this cost on the other hand includes a larger scope of work including money spent on doing things like customer research, merchant onboarding or tax consultations.

“Given a misleading representation of a line item from our statutory filings on legal fees in a section of the media, we clarify that the line item is actually termed legal and professional expenses that includes not just the legal costs but also the costs related to other professional services such as outsourcing, tax consultants, customer research, logistic support services, merchant onboarding services, customer service cost, etc,” a company spokesperson said.

“For instance, for the year ended March 31, 2020, the legal fee was Rs 52 crore, from the total legal and professional expenses of Rs 1,967 crore,” he added.

The development comes after a Morning Context report stated that Amazon Inc had initiated an investigation into the conduct of its legal representatives in India. The investigation is being done following a whistleblower complaint alleging that money paid for legal fees was funnelled into bribes by Amazon’s legal representatives.

Subsequently, an India Today report claimed the company spent about Rs 8,456 crore on legal fee against a turnover of about Rs 42, 085 crore during 2019 and 2020.

Amazon is facing an investigation by the Competition Commission of India (CII) for alleged anti-competitive practices, predatory pricing and preferential treatment of sellers among others.

Last month, Future Retail filed a new case against Amazon at the Supreme Court in the $3.4 billion retail assets sale, which Amazon has challenged.

The Enforcement Directorate, prosecuting authority under the Foreign Exchange Management Act, is also investigating Amazon for possible violation of FDI rules in India. This happened after the central probe agency received a notification from the Ministry of Commerce and Industry a few years ago.

Also read:  A look at Amazon’s legal troubles in India

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