An Amazon shareholder has filed a lawsuit against founder Jeff Bezos and Amazon’s board of directors, alleging the directors failed to adequately review a decision to award a launch contract for the company’s Kuiper satellite project to Bezos’ space company Blue Origin.
The lawsuit, filed earlier this week by the Cleveland Bakers and Truckers pension fund, said Amazon’s board awarded contracts worth billions of dollars to Blue Origin and didn’t transfer rival Elon Musk’s SpaceX is seen as an alternative launch provider, despite the company’s proven track record.
Amazon’s Project Kuiper is a planned network of more than 3,000 satellites designed to deliver broadband internet to remote areas. That makes it a competitor to Musk’s Starlink.
Asked about the lawsuit, an Amazon spokesman said in an email to Reuters: “The claims in this lawsuit are completely baseless, and we look forward to proving them through the legal process.”
The Cleveland Bakers and Truckers Pension Fund, a multi-employer fund, said in its filing that the start-up contract was the second-largest capital expenditure in Amazon’s history at the time. Amazon’s biggest acquisition was the $13.7 billion (nearly Rs 11,332 crore) acquisition of Whole Foods in 2017.
Amazon has paid about $1.7 billion (nearly Rs 1,405 crore) to the project’s three launch providers, including $585 million (nearly Rs 4,850 crore) directly to Blue Origin, the lawsuit said, adding that the company It has yet to launch its Kuiper satellite prototype into orbit.
Amazon said earlier this year that Project Kuiper would begin mass production of satellites later this year and beta-test them with commercial customers in 2024.
The 2024 deployment target will allow Amazon to fulfill the FCC’s regulatory requirement to launch half of the entire Kuiper network of 3,236 satellites by 2026.
The pension fund seeks unspecified damages and legal fees, according to the lawsuit filed Aug. 28 in Delaware Chancery Court.
© Thomson Reuters 2023
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