Wal-Mart India Head Leaves Seven Months After CFO Suspended
Wal-Mart Stores Inc. (WMT) said the head of its Indian unit has left, the latest setback for the world’s largest retailer in the country where it is in the midst of government and internal investigations.
Raj Jain, chief executive officer of the Bharti Walmart Pvt. joint venture, is “no longer” with the company after working seven years at the retailer and six years in the post, it said in an e-mailed statement today. Ramnik Narsey, senior vice president for Walmart International, will serve as interim leader for India, it said, without specifying why Jain left.
Phone calls and text messages to Jain’s mobile phone weren’t returned.
The departure of the top executive adds to the retailer’s pressures in India after it suspended some executives at the joint venture in November, including the local chief financial officer, as it examined potential violations of U.S anti-bribery laws. The Bentonville, Arkansas-based company has said it’s investigating possible violations of the Foreign Corrupt Practices Act in India, Brazil and China along with Mexico.
Pankaj Madan, chief financial officer of the Indian unit, was among the officials who were suspended in November, according to Anthony Rose, a Wal-Mart Asia spokesman.
Madan remains on leave from Bharti Walmart, Wal-Mart said in a separate e-mailed statement today. “We are committed to conducting a complete and thorough investigation and it would be inappropriate for us to comment further until we have finished the investigation,” according to that statement in response to a query on Madan’s suspension.
India in September opened up its retail market to allow foreign companies to own as much as 51 percent of local ventures that sell more than one brand. Overseas brands such as Wal-Mart had been banned from the supermarket industry until then.
An Indian government agency is investigating allegations that Wal-Mart violated rules governing foreign investment in the retail industry, Trade Minister Anand Sharma said in December.
Separately, a panel headed by Mukul Mudgal, a former chief justice, has investigated claims that Wal-Mart broke rules as it lobbied to enter the country’s retail market.
In 2007, Wal-Mart formed a joint venture in India for wholesale stores and has been building a supply chain and logistics network in the country. Wal-Mart owns a 50 percent stake in the wholesale-venture with Bharti which operates 20 cash and carry stores in the country, according to Wal-Mart spokeswoman Arti Singh. Bharti Airtel Ltd. (BHARTI), India’s largest mobile phone carrier, is a part of the Bharti group.
Wal-Mart in May forecast second-quarter profit that was less than analysts estimated as the slow U.S. economy and higher taxes put pressure on consumers. Wal-Mart’s international division increased first-quarter sales 2.9 percent to $33 billion.
In March, Wal-Mart said it had spent $157 million on probes of bribery allegations in its international operations and expects to rack up more costs as the investigations continue. It last year began investigating allegations that executives in Mexico paid more than $24 million in bribes to speed the retailer’s expansion there.
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