Amazon’s India woes ensnare Sunak’s in-laws

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A probe by Indian regulators into the selling practices and tax arrangements of Amazon Inc (NASDAQ:AMZN) has managed to ensnare the in-laws of the UK’s Chancellor of the Exchequer Rishi Sunak.

According to an investigation by the Guardian, Cloudtail, a joint venture company indirectly owned by Amazon and an investment firm controlled by the billionaire Murthy family, is facing demands of £5.5mln from Indian tax authorities as well as questions around its corporate tax payments.

READ: Amazon’s data use to be probed by CMA

Cloudtail is one of the largest sellers on Amazon’s India site and also counts a number of former executives from the ecommerce giant among its senior board members.

Sunak is connected to the Murthy family through his wife Akshata, whose billionaire father NR Narayana Murthy founded IT firm Infosys Limited in the 1980s.

The tax dispute follows news earlier this month that Amazon failed to prevent a renewed investigation by Indian competition authorities into its selling practices, the implications of which could also envelop Cloudtail due to the company’s prominence on the site.

The connection is likely to raise questions about whether Amazon gave preferential treatment to Cloudtail’s products due to its interest in the group, as well as whether the joint venture violates Indian foreign ownership rules.

Meanwhile, the tax probe is likely to add more pressure on the company to pay its fair share after new proposals for a global minimum corporation tax were backed by members of the G7 group of countries last week.

The competition investigation will also add to a pile of existing probes underway against Amazon across the world, with the UK’s Competition and Markets Authority reported last week to be planning a formal investigation into the e-commerce giant, particularly around how it collects and uses customer data.

Shares in Amazon were up 0.2% at US$3,352 in pre-market trading in New York on Monday.

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