India’s Cabinet Approves Panel to Probe Wal-Mart Lobbying
A retired judge of the Supreme Court or former chief justice of a high court will investigate the Bentonville, Arkansas-based retailer, Information & Broadcasting Minister Manish Tewari said in New Delhi after a meeting of the nation’s cabinet today.
Wal-Mart spent as much as $25 million since 2008 on discussions regarding its foreign investments, including in the Indian retail industry, the Press Trust of India said Dec. 9, citing company disclosure filings before the U.S. Senate. Opposition lawmakers in parliament alleged part of the money was spent in India, where paid lobbying is not allowed.
India’s parliament last month endorsed a September decision to allow foreign investment in retail stores selling more than one brand, the centerpiece of Prime Minister Manmohan Singh’s biggest embrace of foreign investment in a decade, as he seeks to revive a slowing economy.
Overseas companies including Wal-Mart, Tesco Plc (TSCO) and Carrefour SA (CA) are seeking to benefit from entering the world’s second-most populous nation, where retail sales are estimated to reach 47 trillion rupees ($875 billion) by 2017, according to a report by Associated Chambers of Commerce & Industry of India and Yes Bank Ltd. (YES)
“We remain excited about the opportunity to grow our business in one of the world’s most brilliant economies, expand opportunities for farmers and help lower the cost of living for families in India,” Kevin Gardner, a Wal-Mart spokesman, said today in an e-mailed statement.
The judge will investigate reports of Wal-Mart’s lobbying disclosures and whether any of the retailer’s activities in India broke the law, according to a statement from the Ministry of Company Affairs today. The findings will be submitted to the government within three months, according to the statement.
Gardner said the allegations being made against Wal-Mart are false.
“These disclosures have nothing to do with political or governmental contacts with India government officials,” Gardner said. “It shows that our business interest in India was discussed with U.S. government officials -- along with 50 or more other topics during a three-month period.”
Wal-Mart has said it is investigating 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 investigating allegations that the world’s largest retailer systematically bribed Mexican officials to more quickly open stores.
The shares rose 0.1 percent to $69.56 at 2:15 p.m. in New York. Wal-Mart advanced 14 percent last year compared with a 13 percent gain in the Standard & Poor’s 500 Index.
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