Amazon has filed a lawsuit against the Enforcement Directorate, preventing a future panel contract investigation

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Amazon is taking India’s financial crime firm to court seeking the cancellation of an investigation into one of its 2019 deals, a court case seen by Reuters.

The Enforcement Directorate of India (ED) has been investigating Amazon’s $ 200 million (approximately Rs. 1,510 crore) investment in India’s Future Group for several months on suspicion of violating foreign investment laws.

The investment has been at the center of a protracted legal battle to stop the sale of $ 3.4 billion (approximately Rs. 25,640 crore) of the Indian company’s retail assets to rivals because Amazon used the terms of the deal – and cited futures breaches – in the future. .

In an 816-page file viewed by Reuters, Amazon called the investigation a “fishing and wandering” investigation, with ED seeking legal advice and opinions offered by Amazon and other information unrelated to the Future Group deal.

The US e-commerce company filed a petition in the Delhi High Court on December 21 alleging that several Amazon executives, including the Indian head of Amazon, had been summoned by the ED in recent weeks for causing “unnecessary harassment”.

This is not in the public domain, as Amazon has filed a lawsuit alleging that “the ED’s request to release legally privileged documents and litigation information is a violation of the principles enshrined in the Indian Constitution.”

“Investigation is a fishing and rowing exercise.”

Amazon and ED did not disclose the details of its inquiries and did not immediately respond to requests for comment. The case is set to go to trial on Thursday.

This filing is the latest twist in the long-running controversy between Amazon and Future. India’s no-confidence group last week suspended their 2019 deal, claiming that Amazon had suppressed the information when it received its approval, and the ED’s investigation is independent of that.

The controversy, centered on three business deals signed between Future and Amazon, has prompted the Singapore arbitration panel – which heard the controversy – to study together when reviewing the transaction.

Merging business agreements in the future would effectively mean an agreement that violates Indian law.

Amazon’s court filing contains ED’s notice dated February 19, which requested details of its future investment, including a copy of the deals, bank account details and other relevant internal contacts.

ED said it was conducting an extensive investigation and sought details of major retailers on Amazon’s e-commerce website in India, including sales numbers that account for more than 5 per cent of total sales on Amazon.in.

The announcement comes after a February Reuters inquiry into how Amazon helped a small number of vendors thrive on its Indian base, using them to avoid discounted fees and foreign investment laws.

Amazon said at the time that it believed it complied with the rules and “does not give preference to any seller in its market.”

© Thompson Reuters 2021


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