Wal-Mart Stores Inc., the world’s largest retailer, said some workers at its joint venture in India have been suspended, as it conducts inquiries into potential violations of U.S. anti-bribery laws.
The retailer is conducting a “complete and thorough investigation,” it said in an e-mailed statement today. The Indian venture, Bharti Walmart Pvt., has suspended planned store openings until the probe is completed, the Economic Times reported today, citing two unidentified people.
Wal-Mart, based in Bentonville, Arkansas, on Nov. 15 said it started inquiries into potential violations of the Foreign Corrupt Practices Act in India, Brazil and China. The U.S. Department of Justice and the Securities and Exchange Commission are looking into allegations Wal-Mart systematically bribed Mexican officials so it could more quickly open stores.
Wal-Mart is trying to gain a foothold in India, where the government in September decided to allow foreign companies to invest in multibrand store chains, a sector they had previously been barred from. Prime Minister Manmohan Singh has faced political opposition to the rule change amid concerns that overseas retailers would force small shop-owners out of business.
An anti-corruption team summoned some employees and told them two weeks ago not to enter Bharti Wal-Mart’s office until after the investigation, the Economic Times reported.
Wal-Mart didn’t provide any details of the people suspended or about the probe it is conducting, saying it would be “inappropriate” to comment before the investigation is complete.
“We are committed to the Indian market,” the retailer said. “We remain excited about the opportunity to grow our business in one of the world’s most vibrant economies.” Wal-Mart began setting up wholesale operations in India in 2007 through its joint venture with Bharti Enterprises Pvt.
In India, Wal-Mart may open retail outlets in the world’s second most-populous country over the next 12 to 18 months, Scott Price, head of Wal-Mart’s Asia operations, said in a Sept. 21 interview in Hong Kong. At that time, it operated 17 wholesale outlets in India with billionaire Sunil Mittal’s Bharti Enterprises.
An Indian lawmaker wrote to Singh’s office questioning whether Wal-Mart violated rules while making Indian investments, a Commerce Ministry official in New Delhi said last month, asking not to be identified because he wasn’t authorized to speak on the subject.
India’s Enforcement Directorate will seek documents from Wal-Mart relating to its financial investments and remittances in the country, Press Trust of India reported Nov. 15, citing a person it didn’t identify.