The Asia chief executive of US multinational retail corporation of Walmart, Scott Price, has appeared before an Indian government-appointed retired judge to probe allegations regarding company violations of local laws.
In a statement, the Indian government has said a decision regarding the next meeting will be made after they have received Walmart’s response to the questions that have been raised.
Walmart first announced its intention to open outlets in the country in September 2012 after the Indian government relaxed its ban on foreign direct investment in the country by allowing retailers to own up to 51 per cent stakes in local supermarkets.
The retailer had disclosed spending US$25m on lobbying US law officials in the past four years, which included issues relating to “enhanced market access for investment in India”.
However, the exact amount spent in this pursuit is unknown. The company has repeatedly and strenuously denied that its activities were unlawful, claiming that the money was not a bribe but a standard detailing of lobbying activity. The latter is legal in the US.
'We are cooperating with the Indian government and the Justice Mukul Mudgal Committee on this issue,' said a spokesperson for WalMart India.
The retailer is facing an additional investigation in India over claims regarding a violation of the country’s rules through an indirect investment in a local retail chain in 2010. At that time, rules did not permit foreign investment in the retail industry.
Since the rules were relaxed in September 2012, Tesco is also looking to establish retail operations in Indian in a retail market estimated to be worth US$500bn annually.
Tesco’s chief executive officer, Philip Clarke, has recently referred to his company’s plans there as still a “work in progress” amid reports of frustration with Indian officials' slow decision-making and ongoing bureaucracy.
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