Walmart to be probed if US inquiries reveal new violations

The Union government will initiate action against Walmart if an ongoing foreign corrupt practices probe in the US reveals any violation in India by the global retail giant.

In an Action Taken Report on a probe into Walmart's lobbying activities, the government has also said it was “continuously monitoring” developments in the US with regard to such lobbying activities and an ongoing investigation into bribery charges against the company.

The Indian probe, conducted by a one-man inquiry panel constituted by the government about a year ago, could not “conclude in the absence of any material evidence available on record up till now, that Walmart indulged in any lobbying/ bribery to Indian officials”.      

The report, tabled in the Rajya Sabha, also said the enforcement directorate was investigating the issue of foreign direct investment  through the automatic route by Walmart in Cedar Support Services, “involving alleged violation of the Foreign Exchange Management Act 1999 and other applicable laws and guidelines”. Not satisfied with replies provided by the US-based retail giant on various issues, including on the exact amount spent on its India-specific lobbying activities, the panel concluded "the matter would need to further investigated" in the event of disclosure of further details in the US. Going by the suggestions made by the probe panel, the government said in the report the “Ministry of External Affairs through Embassy of India in Washington is continuously monitoring developments”.

The developments are being monitored so that "appropriate action could be initiated as and when relevant information becomes available at a future date or the results of any ongoing investigation under USFCPA (US Foreign Corrupt Practices Act) reveals commission of any offence under Indian law", it said.

Walmart had partnered with Bharti for operations in the Indian retail sector, but parted ways in October.

In January, the committee headed by Chief Justice of Punjab and Haryana High Court Mukul Mudgal, was set up. The panel had submitted its report to the government in May.

Regarding the inquiry panel's observation that definition of 'group company' was absent in the FDI guidelines, the government in the ATR said the Department of Industrial Policy and Promotion has since notified a definition of the term under that guidelines.

The committee was set up in the wake of political uproar over disclosure about Walmart's lobbying among the American lawmakers since 2008 for facilitating its entry into the Indian market.