The Indian government has announced its decision that Walmart is not guilty of violating foreign investment rules when the US multinational retailer launched in 2010.
Walmart had been under investigation by the country’s Finance Ministry regarding allegations that it breached Indian rule when purchasing US$100m worth of debentures from Cedar Support Services (CSS) in 2010.
CSS is the holding company of Bharti Retail, which also runs supermarket chain Easyday. Walmart and Bharti formed an agreement to convert the debentures into a 49 per cent stake after a lock-in period of three years.
The US retailer was subsequently accused of violating the country’s laws, give that foreign direct investment (FDI) in multi-brand retail had not yet been legalised.
However, the ministry eventually concluded that the two companies’ deal conformed to central bank rules and other regulations pertaining to indirect investments.
A Walmart spokesperson reiterated the retailer’s cooperation with investigators during the probe and their compliance with India’s FDI laws.
Walmart and Bharti recently ended their six-year joint venture, which had operated 20 wholesale stores in India under Best Price Modern brand.
The conclusion of this venture means that Walmart now wholly owns and operates these stores.
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