Walmart lobbying case 'closed'

Last Updated: Sat, May 18, 2013 05:25 hrs

The investigation into lobbying by Walmart, an issue that had rocked the winter session of Parliament last year, has been closed due to lack of any conclusive evidence of bribery in the India market, according to sources.

The one-man committee of former chief justice of Punjab and Haryana High Court Mukul Mudgal, probing the matter for the past few months, is likely to submit its report to the government early next week.

Mudgal refused to comment.

It is learnt that the report may not say the US-based retail giant did not bribe any Indian official or contravene Indian rules while trying to gain wider access to the market here. However, it is likely to state that there was no adequate evidence to suggest that Walmart was involved in any unlawful activity in India. Sources said the panel might also recommend that India frame rules to make lobbying by companies legal.

The Cabinet had cleared up to 51 per cent foreign direct investment (FDI) in multi-brand retail in September 2012, but Walmart is yet to make a proposal to the government for opening retail stores. The $447-billion retail chain, the largest in the world, could only set up cash-and-carry outlets in the absence of FDI in multi-brand retail till recently. Since 2009, Walmart and Bharti, in a 50-50 joint venture, operate 20 stores in the cash-and-carry segment, a sector where 100 per cent FDI is permitted.

Just when things had started to look up for Walmart in India, reports alleging bribery in its Mexican operation had surfaced. This was quickly followed by the company suspending at least five of its India employees for suspected corruption. In November 2012, Walmart extended an internal investigation into bribery charges in Mexico to India, China and Brazil. Soon came the disclosures on Walmart lobbying with US senators on multiple issues, including gaining wider access to the Indian market.

The company said it had paid $25 million between 2008 and 2012 towards lobbying fees. Walmart had said lobbying was legal in the US.

Timeline of Walmart lobbying issue

* Apr 2012: The New York Times reports executives at Walmart's Arkansas headquarters suppressed an internal probe that found evidence that its Mexican subsidiary had paid bribes to open more stores in that country
* Sept 2012: India allows up to 51% FDI in multi-brand retail
* Nov 2012: Walmart discloses it had expanded a bribery investigation initially focused on Mexico to India, China and Brazil; Bharti Walmart suspends a few "associates" to ensure "thorough investigation"
* Dec 2012: Walmart's US lobbying disclosures rock Parliament
* Jan 2013: One-man committee set up to probe Walmart's lobbying activities in India

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