Amazon has taken the Enforcement Directorate, or ED, to court seeking to cancel an investigation into its 2019 deal with Future Group for alleged violations of foreign investment laws, sources have said.
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Amazon calls the investigation a "fishing and roving" inquiry, saying the ED had sought privileged legal advice and opinions from Amazon and other information not connected to the Future Group deal, sources have said. It said the ED doesn't have "requisite jurisdiction... to investigate issues relating to people joining or leaving the legal team of Indian Amazon entities in India..."
"The directions by the ED asking for disclosure of legally privileged documents and litigation privilege information is derogatory of the principles" laid out in Constitution, Amazon said in a 816-page filing. "The investigation is a fishing and roving exercise," it said.
Amazon has also sought the Delhi High Court's advice on the reasons behind ED expanding its scope and powers in the probe and summons to its executives who aren't connected to or aren't aware of the Future-Amazon transactions to testify in person.
The ED has for months been probing Amazon's Rs 1,430 crore investment in Future Group for suspected violations of foreign investment laws. The investment is at the centre of protracted legal battles, as Amazon has used the terms of that deal - and cited contract breaches by Future - to stall Future Group from selling its assets to Mukesh Ambani's Reliance Retail for Rs 24,500 crore.
Multiple Amazon executives, including its India head, had been summoned by the ED in recent weeks and the investigation had caused "unnecessary harassment," the US etailer giant said in its filing to the Delhi High Court on December 21.
The filing is the latest twist in the long-running dispute between Amazon and Future. Though the country's antitrust body suspended their 2019 deal last week, saying Amazon had suppressed information when seeking approvals for it, the ED's probe is independent of that.
The dispute centres around three commercial agreements signed between Future and Amazon entities, which a Singapore arbitration panel - also hearing the dispute - has said must be read together when reviewing the transaction. Future contends conflating the commercial agreements would effectively mean the deal violated Indian law.
Amazon's court filing contained a notice from the ED dated February 19 which sought details of its investment in Future, including copies of agreements, bank account details and other related internal communication.
It also showed the ED is conducting a far wider probe, and had sought details of big vendors on Amazon's website in India, including sales numbers for those that account for more than 5 per cent of total sales on Amazon.in.
The ED started proceedings under the Foreign Exchange Management Act, or FEMA, based on observations of a single-judge order of the Delhi High Court on Amazon's "control" on Future through three agreements. The Delhi High Court will hear Amazon's plea on January 5.
