Walmart India Suspends CFO, Others Pending Bribery Probe
By Sreeja V N | November 23, 2012 8:00 PM EST
Walmart and Bharati Enterprises have suspended the chief financial officer and other staff of their joint venture in India pending the outcome of an investigation into a bribery charge.
The development is expected to delay the entry of Walmart into the Indian multi-brand retail market.
"We are committed to conducting a complete and thorough investigation. Walmart and Bharti have suspended a few associates pending the outcome of the investigation," a spokeswoman for Bharti Walmart Pvt. Ltd. said in an emailed response to the queries by the Dow Jones Newswires.
Two weeks ago, Walmart announced an investigation into the alleged violations of the U.S. anti-bribery laws by its India, China, Brazil and Mexico units.
"We have inquiries or investigations regarding allegations of potential FCPA [Foreign Corrupt Practices Act] violations in a number of foreign markets where we operate regarding FCPA allegations, including but not limited to Brazil, China and India. This is in addition to the ongoing investigation in Mexico," the company said in a statement on its website.
A company official, who refused to be named, told Reuters that such suspensions were a routine practice globally to ensure fairness in investigations.
"The suspension is a routine global practice followed in such investigations. We cannot carry out a fair investigation when the people we are investigating are in office. What we must not forget is they are innocent until proven guilty," the official at the Indian unit said.
Meanwhile, the authorities in India have started a probe into the alleged violation of the foreign exchange rules in the country by Walmart. They launched the probe on a complaint by a lawmaker who alleged that the U.S. retail giant invested in the domestic frontend units of Bharti Enterprises by violating the Foreign Exchange Management Act.
Both the developments have strengthened the protest in India against FDI in retail and would delay the U.S. retail giant’s planned entry into multi-billion Indian retail market.
FDI in retail is opposed by the Left and opposition parties in the country though the government has gone ahead with the reform measure to revive the economic growth that touched a nine year-low in the last quarter.
The first day of the Indian parliament’s winter session Thursday was disrupted as the angry opposition protested against the reforms bill and demanded a debate and voting on the issue.
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