Fri, September 1, 2023
Bezos' Blue Origin, founded in 2000, ran its first private space tourism flight in 2021 - AFP
Amazon has been accused of ignoring a “glaring conflict of interest” when awarding hundreds of millions of dollars in rocket contracts to a company owned by Jeff Bezos.
A lawsuit filed by an Amazon shareholder accuses the e-commerce giant’s board of acting “in bad faith” after handing a contract to Mr Bezos’s rocket company, Blue Origin, after less than 40 minutes of discussion.
Amazon is planning to launch a vast network of more than 3,000 satellites that will provide internet access around the world.
As part of the plan, it must contract rocket companies to fire its satellites into space.
Amazon has already paid about $1.7bn to three companies, including $585m to Mr Bezos’s Blue Origin. Its other contracts are with France’s Arianespace and United Launch Alliance.
The Cleveland Bakers and Teamsters Pension Fund, which is bringing the lawsuit, said the rocket launch contract was the “second largest” in Amazon’s history, after its $13.7bn takeover of Whole Foods.
The legal claim alleges the company’s audit committee “inexplicably” did not consider awarding the contract to rival billionaire Elon Musk’s SpaceX, despite the rival company’s track record for successful rocket launches.
SpaceX was not among the options presented to board members, the lawsuit claims.
The lawsuit argues the board had little role in negotiations. Instead, Mr Bezos and his team led the negotiations with a company he also owned, it is claimed.
The company’s audit committee “rubberstamped” the transaction in January 2022 when Mr Bezos was still chief executive of Amazon, the suit alleges. Two months later, the deal was approved by the board.
The entire Amazon board, including Mr Bezos, are defendants in the case.
The lawsuit adds that, beyond the potential conflict of interest, there was not enough scrutiny of “Blue Origin’s lack of reliability”. The claim states the company’s heavy lift rocket remains “firmly rooted to the ground”. Amazon has yet to launch a single satellite.
While Mr Bezos’s rocket company has launched half a dozen tourist flights to the edge of space, its current New Shepard rocket has not flown for over a year. The first launch of its larger New Glenn rocket is not planned until next year.
An Amazon spokesman said: “The claims in this lawsuit are completely without merit, and we look forward to showing that through the legal process.”
No comments:
Post a Comment