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Friday , January 25 , 2013
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Ex-judge to probe Walmart charges

New Delhi, Jan. 24: A one-man committee under a former Supreme Court judge or a retired high court chief justice will probe allegations that Walmart broke laws to enter India’s cash-and-carry business.

The cabinet decision on the US retail giant, which has a joint venture with local partner Bharti, was taken on a day commerce minister Anand Sharma met Walmart global CEO Doug McMillon at the ongoing conclave of the World Economic Forum in Davos.

The probe announcement also came over a month after proceedings in Parliament’s winter session were paralysed over allegations that the company lobbied to enter India. Bharti Walmart has denied wrongdoing and termed the allegations “entirely false”.

The committee, to be set up under the Commission of Inquiry Act, 1951, will submit its report within three months of being constituted, said minister Manish Tewari, who briefed reporters in Delhi after the cabinet meeting where the probe decision was taken.

Under the inquiry act, it will be obligatory on the part of the government to table before Parliament the findings of the probe as well as the action-taken report.

At his meeting with Sharma, McMillon spoke of being “excited about India” and said his company was studying conditions before making final announcements on possible investments in setting up stores directly catering to customers in the wake of the Centre’s decision to allow FDI in multi-brand retail.

Sharma assured the global retailer that India’s FDI policy “has finality and that it need not be unduly concerned about any reversal”.

He also asked Walmart officials to send requests for clarifications, if any, to his ministry. “All necessary clarity will be provided,” Sharma, who also met the chief executive of British retail giant Tesco today, said.

The Manmohan Singh-led UPA government last year allowed foreign supermarket chains to enter the country with 51 per cent ownership in the face of fierce opposition. However, it placed stringent conditions, including mandatory sourcing from small Indian businesses and investments in backend infrastructure, to soften the criticism.

The committee cleared today will look at recent media reports on Walmart’s disclosures before the US Senate on alleged lobbying, and whether the $447-billion giant undertook such activities in India in contravention of laws and procedures in floating its venture with Bharti.

According to the disclosure reports filed by Walmart with the Senate, the company spent close to $25 million (around Rs 135cr) since 2008 on lobbying activities, including on issues related to “enhanced market access for investment in India”. In the quarter ended September 30, the spending was $1.65 million (Rs 10 crore) and the issues included “discussions related to FDI in India”, according to the reports.

But Bharti Walmart, rejecting the allegations, has claimed the amount mentioned in the disclosure was a “compilation of expenses associated with staff, association dues, consultants and contributions spent in the US”.