MUMBAI/NEW DELHI, Oct 18 (Reuters) - India's government has
not ordered a probe into Wal-Mart Stores over
accusations the U.S. retailer violated foreign ownership rules,
Indian officials said on Thursday in response to a media report.
Wal-Mart, which is expected to open its first Indian store
after a change to ownership rules, said it had not been
contacted on the subject by Indian authorities.
The Financial Times said the Commerce Ministry last week
asked the central bank to investigate allegations that the
world's largest retailer had "clandestinely and illegally"
invested in supermarkets in the country. The accusations were
made by a Communist Party member of parliament in a letter to
the prime minister.
An Ministry of Commerce and Industry official, who declined
to be identified, said the ministry had forwarded the complaint
on Oct. 10 to the Reserve Bank of India for examination, but
said the ministry had not asked for a formal probe into the
Pankaj Pachauri, a spokesman for the office of Prime
Minister Manmohan Singh told Reuters: "Every letter that comes
from an MP is routinely forwarded to the department concerned
for examination. We did not order a probe. We got a letter from
an MP and in due course we forwarded it to the department
A Wal-Mart spokeswoman in India, who declined to be named,
said the company had not been contacted by the ministry or the
central bank and was in full compliance with India's foreign
direct investment laws.
"All procedures and processes have been duly followed and
details filed with relevant Indian government authorities,
including the Reserve Bank of India," the U.S.-based retailer
said in a statement.
India recently allowed foreign retailers to own up to 51
percent in supermarkets, a decision made in the face of fierce
political opposition. Previously, Wal-Mart and other foreign
players were only allowed to own wholesale operations.
Wal-Mart was the most vocal advocate for the rule change and
is expected to open its first retail store within 18 months.
The member of parliament from the state of Kerala, M.P.
Achuthan, whose party opposes foreign direct investment in
retail, accused Wal-Mart of investing $100 million as early as
early 2010 in a multibrand retail business.
In September, Achuthan had questioned Wal-Mart's role in
Easyday stores, which are controlled by Bharti Enterprises, its
partner in a wholesale joint venture.
India's commerce minister answered that Wal-Mart
Mauritius(4) Holdings Co Ltd held debentures that are
convertible into a 49 percent equity stake in Cedar Support
Services, the company previously known as Bharti Retail Holdings
that holds Easyday.
An RBI spokeswoman said the central bank does not have
investigative powers. Another RBI official declined to comment.
Achuthan told Reuters he had not been told by the government
that any investigation had been ordered.