Delhi High Court : Amazon Seeks Relief From ED Investigation : Foreign Exchange Laws

On 22^nd December, 2021 (Wednesday), the US E-Commerce giant Amazon approached the Delhi High Court seeking relief from ongoing Enforcement Directorate (ED) investigation charging the agency of conducting the probe relating to Amazon’s 2019 investment into a Future Group firm in a manner that is “beyond the scope and power” under India’s foreign exchange laws.

In a petition filed on Wednesday, Amazon pleaded for an ad-interim order stay on ED’s probe and summons pertaining to an inquiry that the agency initiated last month to find if Amazon had violated India’s FEMA rules while investing into Future Coupons Pvt Ltd (FCPL), a promoter company of Future Group.

Amazon has alleged that ED has sought accounts of privileged legal opinion given to it by lawyers and law firms in India. Amazon also alleged the agency asked it to furnish a list of its former employees in its legal team and provide accounts of banks details and legal expenses incurred by the Seattle-based giant in India in the last ten years.

Amazon accused ED of conducting a “fish and roving enquiry” against it and said such requests are beyond the agency’s jurisdiction.

Amazon didn't respond to an email seeking comment on Wednesday’s petition.

The 2019 investment by Amazon into FCPL triggered more than two dozen legal cases between Amazon and Future Group in the Delhi High Court and Supreme Court and in tribunals including the National Company Law Tribunal (NCLT) and the Singapore International Arbitration Centre. The dispute effectively scuppered a deal to sell Future Group’s assets to Reliance Retail for Rs 25,000 crore more than a year. Amazon said its investment agreements in 2019 into FCPL – that owns 10% of the listed Future Retail Ltd (FRL) - bar FRL from selling any asset to several companies including Reliance.

Last week, the Competition Commission of India (CCI) put into “abeyance” its 2019 approval given to Amazon’s investment into FCPL and imposed a Rs 200 crore fine on the US e-commerce giant, holding that it had not disclosed its interest in the Indian retailer when it sought clearance for the deal and had misled the antitrust body.

Prior to that in November, the ED had summoned Amazon's Indian management, including its country head Amit Agarwal, in connection with its disputed deal with FCPL and the agency also issued summons to Future Group promoters and officials to cross-verify documents and the evidence it had collected so far in the matter.

ET had reported earlier this month that Amazon India head Agarwal did not appear before the ED and had sought exemption from appearance as he was in the US.

“ED cannot compel the petitioner number 1 (Amazon) to submit privileged legal advice and legal opinions given by law-firms/advocates and legal counsel of Amazon,” the Wednesday petition reviewed by ET said. Amazon further said ED is seeking information that is “not even connected to the Future Group transaction.”

Amazon charged that ED was causing “unnecessary harassment” with its demands.

Source : Latest Law