No probe into Bharti Walmart, says government
19 Oct 2012
The government has denied ordering any specific probe into Wal-Mart Stores over accusations that the US-based retail chain violated foreign investment rules when it entered into a deal with Bharti Retail for the 'Easyday' chain of single-brand stores.
News agency PTI as well as international publications like The New York Times and London's Financial Times reported that the Department of Industrial Policy and Promotion (DIPP) had, on instructions from the Prime Minister's Office, launched a probe into allegations that Wal-Mart contravened the Foreign Exchange Management Act (FEMA) when it invested nearly $100 million in the partnership with Bharti.
Wal-Mart, which is expected to be the first to open a multi-brand retail store in India after the recent change of rules on foreign direct investment in retail, said it had not been contacted on the subject by Indian authorities.
The reports said the commerce and industry ministry last week asked the Reserve Bank of India (RBI) to investigate allegations that the world's largest retailer had "clandestinely and illegally" invested in supermarkets in the country at a time when such investments were heavily restricted.
The accusations were made by a Communist Party of India Member of Parliament from Kerala, M P Achuthan, in a letter to the prime minister. He claimed that Wal-Mart had invested in Bharti in 2010, when foreign direct investment in retail was completely barred.
The Left parties are the most vocal critics of foreign investment in India.
