By Satarupa Bhattacharjya
NEW DELHI, Nov 16 (Reuters) - Indian authorities are
investigating allegations that Wal-Mart Stores Inc.
violated foreign exchange rules when it invested $100 million
into a domestic unit owned by its wholesale joint-venture
partner, a senior law enforcement official told Reuters on
The decision to probe Wal-Mart comes after an Indian
lawmaker wrote to the prime minister earlier this year, raising
allegations of potential violations of investment rules, and the
complaint was subsequently passed from one government department
"Yes, the Enforcement Directorate has initiated an
investigation into the allegations against Wal-Mart," said the
official, who declined to be named.
"The probe is at an early stage and therefore (it is)
difficult to say what the outcome will be."
Wal-Mart has denied the allegations since they first
surfaced last month.
"We are in compliance with India's FDI laws. All procedures
and processes have been duly followed and details filed with
relevant Indian government authorities, including the Reserve
Bank of India (RBI)," a Wal-Mart spokesman said.
"The central Government has sought certain information and
clarification, which has been provided by us. We are not in a
position to offer further comments as the matter is before the
The lawmaker accused Wal-Mart of "clandestinely and
illegally" investing $100 million in the multi-brand retail
business of its wholesale joint venture partner, Bharti
Enterprises, as early as 2010, before India allowed foreign
companies to operate front-end stores.