Most respected Mr. Murthy,
Trust you and your family are safe.
I am writing to you on behalf of crores of small retailers, sellers, small family-owned micro-enterprises and SMBs across India.
The first wave of Covid in 2020 hit their business badly. As they were slowly picking up the pieces of their livelihood and business, the second wave is now threatening to deliver another severe blow.
However, these two waves are not the only one that has brought them to their knees. Before Covid, there was another crisis that hit their livelihood and the future of their children and families. This is a crisis that continues to plague them and you, Mr. Murthy, could be a key factor in ending this scourge.
For years, Mr Murthy, you have been the idol of millions of Indians. With your constant emphasis on honesty, integrity, fairness, values and transparency, you have demonstrated that it is possible to build a world class business based on principles of ethics and accountability.
More than leading the Indian IT services revolution for India, what most people consider your greatest achievement is your adherence to the dharma of straight and the narrow. At one point, some people even wanted you to become the President of our country.
Unfortunately, Mr. Murthy, this perfect image of yours is slipping away in the minds of observers like us.
In 2014, your investment company Catamaran entered into a Joint Venture agreement with Amazon to form Prione. On paper, Prione is majority owned by Catamaran. However, in reality, Catamaran owns its shares as a “trustee of Hober Mallow Trust”.
Sir, a mantra that you have always held as core is transparency. In your own words “Transparency is a prime value attribute in the corporate world because good corporate governance depends on transparency.” You have said several times “When in doubt, disclose without any hesitation.” This is dharma that you have flagrantly violated when it comes to Catamaran’s real relationship with Amazon.
Who really owns the mysteriously named Hober Mallow Trust? How much of your equity is invested in these companies? Does Amazon give you a fixed fee or a fixed return for lending your name to this nefarious quagmire of multiple companies, trusts and LLCs named after Catamaran, Prione and Hober Mallow Trust?
You have consistently stonewalled all queries. A recent media report said that all queries with regards to the contributors and beneficiaries of Hober Mallow Trusts and trusteeship fees or the asset management fee earned by Catamaran, were not answered and have never been disclosed.
In your much quoted interview with the Harvard Business Review in 2011, you said “A good company must always go beyond following the law. Ethical behavior transcends legal compliance: It’s about satisfying your conscience, whereas legal compliance is about satisfying the authorities.” Yet, it is this very principle that you have brazenly flouted.
The Government of India, under the leadership of Shri Narendra Modiji rightfully believes that small Indian retailers need protection from foreign companies with deep pockets in doing retail business in India. By law, Amazon can only operate a marketplace and can’t do retailing.
Since 2014, you have been in cahoots with Amazon – through what appears to be a name-lending arrangement with Cloudtail acting as a front for Amazon’s retail business – and defied the objectives of the policies of the Government of India. To what end, Sir? Just for a fixed fee or returns, have you sacrificed the interests and livelihood of millions of small traders in India and left us at the mercy of a nefarious company like Amazon?
Since 2014, when you gave your name to Cloudtail India, it has been the largest seller on Amazon India. On paper, this arrangement does not flout India’s FDI regulations. However, in reality, is it the mysterious Hober Mallow Trust that actually owns and controls Cloudtail. Some signs are clear – the senior leadership of Cloudtail as well as majority of board members of Cloudtail are all former Amazon employees. In 2018, the government amended the laws to stop these practices of foreign retailers forming front companies to carry out retailing. You promptly increased your stake to 74%, but changed nothing else!
This deceitful stealth conquest of Indian retail by Amazon is hurting 100 million families in India whose lives and livelihood depends on their small shops and micro establishments. Due to Covid, buying has moved online and due to your arrangements with Amazon, these small and medium family-owned businesses are left with no option to earn their livelihoods. Sir, Amazon is legally bound to be a marketplace in India. Instead, Catamaran along with a handful of other enterprises dominate and capture more than 90% of retail business on Amazon, leaving little scope for these small and medium family-owned businesses to do any business and earn their livelihood.
Sir, perhaps you entered into a business with Amazon in 2014, in good faith. Now, you have been turned into a ‘night watchman’ for Amazon which is playing a test match to dominate India’s retail business by investing billions of dollars every year.
With every passing year, you are falling deeper and deeper into a quagmire that does not do your good standing and reputation any justice. A Reuters report showed documentary proof that the objective of Amazon is to “test the boundaries of Indian law.” With your multiple corporate structures, you have become a party to this objective.
Sir, you are a Senior and Respected Leader of India. You do not need to be a sleeping partner of an enterprise that is clearly built on an edifice of dishonesty and opaqueness.
You have been on record saying that “the softest pillow is clear conscience.” And that “honesty makes a person sleep well because they know they have done nothing wrong.”
Sir, Amazon is under investigation by the Enforcement Directorate, Competition Commission of India and various Indian regulators. The US Senate is investigating its rampant abuse of monopolistic powers and workers’ rights. Regulators in Japan, Italy, France and Germany are investigating its naked abuse of power and tax avoidance. Is this the kind of company you want to earn money from?
Mr Murthy, do you sleep well, knowing that all the principles that you have stood for and espoused your entire life, have been violated and that is what people like us increasingly believe?
In 1994 at Infosys, you courageously and famously walked away from your biggest client based on the conviction of your principles,
In 2021, invoke the spirit of 1994. Walk away from the mess that Amazon has entangled you in.
You owe this to India and you owe this to the crores of Indians who admire you and once even wanted you to be the president of this country.
Do it for all Indians across the world, so that we know that one of our tallest corporate stalwarts, is not a Valmiki who turned into Ratnakar.
Do it also for your inner soul and your troubled conscience.
(President all india mobile dealers association)