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Friday, November 16, 2012

Walmart paid bribes in India? Retail giant probing allegation


Oppn May Use It To Fight FDI In Retail


New Delhi: Walmart has disclosed that it is probing alleged violations of the US anti-bribery law in India, China and Brazil, a development that may trigger fresh opposition to the opening up of domestic retail market to global firms. The disclosure will provide ammunition to the opposition that is planning to corner the UPA on its decision to allow FDI in multi-brand retail when winter session begins next week. "Since the implementation of the global review and the 
enhanced anti-corruption co
mpliance programmes, we have identified or been made aware of additional allegations regarding potential violations of the Foreign Corrupt Practices Act," Walmart said. WIDENING WEB 
EARLY 2011 | Walmart began audit of anti-corruption practices of foreign arms in 
Mexico, China and Brazil 
JULY 2011 | The retailer identified "significant weaknesses" in the 3 countriesAUTUMN 2011 | Probe widened to cover all 26 subsidiaries APR 2012 |New York Times reported that in 2005, Walmart 
had found "credible evidence" of Mexican subsidiary paying bribes to open more stores 
NOV 15, 2012 | Walmart officially acknowledges internal probe into alleged violation of US anti-corruption law in India, China and Brazil 
    We will not tolerate  noncompliance anywhere or at any level of the company. Our expectation is that each and every one of our associates will adhere not only to the letter of the law, but also to the highest standards of personal integrity — Walmart 
ED probes Walmart investment in India 
    
The Enforcement Directorate has started a probe into allegations of violation of foreign exchange rules by Walmart in its investment of $100 million (around Rs 450 crore at the 2010 exchange rate) in a company owned by the Bharti group, its joint venture partner in the wholesale cash and carry business. The RBI, which was asked by the commerce ministry to examine a possible Fema violation in the deal, has reportedly asked the ED to probe the charge. P 17 
WALMART PROBE BJP says retail FDI issue has turned murkier 
New Delhi: On its probe into alleged corrupt practices in India, China and Brazil, Walmart said, 
    "When allegations are reported or identified, we, together with our third party advisors, conduct inquiries and when warranted, we open investigations." The company added, "We have 
inquiries regarding allegations of potential FCPA violations in a number of foreign markets where we operate, including but not limited to Brazil, China and India. This is in addition to the ongoing investigation in Mexico." 
    The disclosure, made in a regulatory filing, suggests Walmart has uncovered evidence of potential violations of the FCPA as the fallout continues from a bribery scheme involving the opening of stores in Mexico that was the subject of a New York Times investigation in April. NYT quoted an unnamed source as saying that the disclosure did not mean that Walmart had concluded it had paid bribes in China, India and Brazil. "But did indicate the company had found enough evidence to justify concern about its business practices in the three countries—concerns that go beyond initial inquires and that are 
serious enough that shareholders need to be told," the newspaper said. It also said the justice department and the Securities & Exchange Commission were looking into the company's compliance with the anti-bribery law. 
    When contacted, a Walmart India spokesperson declined to comment on specific allegations until investigations were concluded by the company. 
"This investigation is unrelated to the recently publicized public interest lawsuits related to claims that Wal-Mart is in violation of FDI laws," the spokesperson in an emailed response to TOI. 
    NYT reported that the expanding investigation began in spring 2011 as a relatively routine audit of how well Wal-Mart's foreign subsidiaries were complying with its anti-corruption policies. The audit initially included Mexico, China and Brazil with accounting firm KPMG and law firm Greenberg Traurig conducting interviews and spot checks of record systems. 
    The BJP said the latest disclosure by the US retailer makes the issue of allowing FDI in multi-brand retail "murkier". "We need to have answers as to why the government is in a hurry to allow FDI in multi-brand retail.These questions need to be answered," BJP spokesperson Nirmala Sitharaman said.



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