Embattled Walmart under probe in India too
16 Nov 2012
Even as global retail chain Wal-Mart Stores Inc on Thursday reported that its internal investigation into violations of anti-bribery laws had extended beyond Mexico to China, India and Brazil, it has today emerged that Indian Enforcement Directorate officials are investigating claims that Walmart violated foreign exchange rules when it invested $100 million in an Indian domestic unit owned by its wholesale joint-venture partner, the Bharti Group.
A member of Parliament belonging to the CPI (M) raised the allegations in a letter to the prime minister in early September, and the complaint was subsequently passed from one government department to another without action being taken. Walmart, the world's largest retailer, has denied any wrongdoing.
"Yes, the Enforcement Directorate has initiated an investigation into the allegations against Walmart," Reuters cited an unnamed ED official as saying.
"The probe is at an early stage and therefore (it is) difficult to say what the outcome will be," he said.
The allegations relate to the company's complex investment through debentures - which could later be converted to an equity stake - at a time when direct ownership by foreign firms was prohibited.
Meanwhile, in the US, Walmart registered in a mandatory Securities and Exchange Commission (SEC) filing that its inquiries into potential violations of the Foreign Corrupt Practices Act (FCPA) had expanded. The store chain also reported quarterly sales below analysts' expectations.
