July 23, 2024

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An Amazon shareholder sues Bezos’ board over Blue Origin launch contracts

An Amazon shareholder sues Bezos’ board over Blue Origin launch contracts

Aug. 31 (Reuters) – An Amazon (AMZN.O) shareholder has sued founder Jeff Bezos and the Amazon board alleging that the directors failed to fully scrutinize the decision to award the launch contracts for the company’s Project Kuiper satellite to Blue Origin, Bezos’ company. . Space company.

The lawsuit filed earlier this week by the Cleveland Bakers and Teamsters Pension Fund alleges that Amazon’s board awarded billions of dollars in contracts to Blue Origin and did not consider Elon Musk’s rival SpaceX as an alternative launch provider despite its track record.

Amazon 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 spokesperson said in an email to Reuters: “The allegations in this lawsuit are without merit whatsoever, and we look forward to showing this through the legal process.”

The Cleveland Bakers and Teamsters Pension Fund, a multi-employer fund, said in its filing that the launch contracts were the second-largest capital expenditure in Amazon’s history at the time. Amazon’s largest acquisition was the $13.7 billion purchase of Whole Foods in 2017.

Amazon has already paid about $1.7 billion to the project’s three launch sponsors, including $585 million to Blue Origin directly, the lawsuit says, adding that the company has yet to launch a prototype of its Kuiper satellite into orbit.

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Amazon said earlier this year that Project Kuiper will begin mass-producing the satellites later this year and beta-test it with commercial customers in 2024.

A deployment target of 2024 would keep Amazon on track to meet a regulatory mandate by the FCC to launch half of the entire Kuiper network of 3,236 satellites by 2026.

The retirement fund is seeking unspecified damages and legal fees, according to a lawsuit filed Aug. 28 in Delaware Chancery Court.

(Reporting by Chandni Shah and Abhinaya Vijayaraghavan in Bengaluru; Reporting by Mohamed for The Arabic Bulletin) Additional reporting by Lavanya Ahir; Editing by Kevin Krolicki and Miral Fahmy

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