New Delhi, Nov. 15 (PTI): The Enforcement Directorate (ED) will soon issue notices to US retail giant Walmart in its probe into the company’s investment in an Indian firm that allegedly violated foreign exchange laws.
“The agency has received a communication from the RBI to probe the investments in this regard. Notices for want of documents with regard to financial investments and remittances will be issued by the Bangalore office of the agency,” a source said.
The agency, which has registered a case under the Foreign Exchange Management Act (Fema), will also ask the commerce and industry ministry to furnish it with clearances that were given to the company to route the investment in 2010 in a subsidiary of Bharti ventures via a Mauritian arm. The investigations are being conducted to probe allegations that Walmart put money into the domestic multi-brand retail chain despite a ban on foreign direct investment in the sector.
Bharti Enterprises has, however, rejected the allegations that it has violated any rule.
The Rs 455.8-crore investment by Walmart in Cedar Support Services Ltd — a subsidiary of Bharti Ventures — had come under attack from CPI Rajya Sabha member M.P. Achuthan, who had written to Prime Minister Manmohan Singh, saying it was “illegal” and flouted FDI rules.
Earlier this month, the Reserve Bank had asked the ED to check the alleged violations made by the US-based retail giant.
Focus on corruption
Walmart today said it was investigating allegations of corrupt practices against it in foreign markets, including India. In March 2011, the company had started a worldwide review of its policies, practices and internal controls for compliance with US Foreign Corrupt Practices Act (FCPA).
“We have inquiries or investigations 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 company said in a statement on its website.