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FDI in retail backlash targets Wal-Mart

Opposition parties insist on time-bound judicial probe or investigation by a joint parliamentary panel
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First Published: Tue, Dec 11 2012. 12 59 PM IST
The move comes days after the government defeated opposition-sponsored votes in the Lok Sabha and the Rajya Sabha disapproving moves by the government to allow FDI in multibrand retail. Photo: Reuters
The move comes days after the government defeated opposition-sponsored votes in the Lok Sabha and the Rajya Sabha disapproving moves by the government to allow FDI in multibrand retail. Photo: Reuters
Updated: Wed, Dec 12 2012. 12 42 AM IST
New Delhi: India’s opposition parties disrupted Parliament and sought to discredit a flagship economic policy over a disclosure made by Wal-Mart Stores Inc. in the US about its lobbying expenses in that country despite the company as well the US state department clarifying that the lobbying was with US lawmakers and done in the US.
Wal-mart disclosed it had paid $25 million (around Rs.135 crore today) over four years to lobby US lawmakers to help it gain access to foreign markets, including India.
Lobbying is legal in the US, and illegal, but not entirely absent, in India.
Representatives of the Bharatiya Janata Party (BJP) as well as the Communist parties latched on to the $25 million number mentioned in that disclosure, and alleged that some of it had found its way to India, as bribes paid to facilitate its entry into the country.
Analysts say the opposition parties may be bitter after they lost a vote to block foreign direct investment (FDI) in retail stores last week and could be confusing the lobbying expense with another disclosure made by the US retailer in November that it was investigating possible violations in India of the US Foreign Corrupt Practices Act that aims to prevent American companies bribing officials in other countries. Bharti Walmart Pvt. Ltd, a joint venture between the US retailer and Indian company Bharti Enterprises Ltd, has since suspended five people, including its chief financial officer, as it investigates the issue.
The government seemed to blink, and offered to order an inquiry, but the opposition parties insisted on a time-bound judicial probe or an investigation by a joint parliamentary committee.
An unidentified senior member of the Congress party told Reuters there was nothing to investigate and ruled out a parliamentary or judicial inquiry.
“We want a reply from the government in this House about how they are going to probe this matter. The government must tell us whether it is constituting a judicial inquiry or ordering a probe by a joint parliamentary committee,” BJP leader Yashwant Sinha said.
“The House will not function unless the government gives it an answer,” he said before the House adjourned.
The government is hoping to get key Bills through Parliament this session, including a crucial amendment to banking laws that some analysts expected to see passed today.
Meanwhile, Wal-Mart said the allegations were false.
“The expenditures are a compilation of expenses associated with staff, association dues, consultants, and contributions spent in the US,” said a spokesperson for Bharti Walmart.
“On the US side, I don’t have any reason to believe we have a violation of US law here. With regard to the Indian side, I’ll refer you to them,” said US state department spokesperson Victoria Nuland.
Parliamentary affairs minister Kamal Nath said the government intended to order an inquiry as the BJP sought suspension of Question Hour in both Houses to discuss the issue.
“The government views this with utmost concern and has no hesitation in ordering an enquiry on this in as much as it concerns payments made in India,” the minister said in the Rajya Sabha.
After Parliament adjourned for the day, Congress leaders, including party president and United Progressive Alliance chairperson Sonia Gandhi, met Prime Minister Manmohan Singh to discuss their strategy to end another potential parliamentary logjam.
Bentonville, Arkansas-based Wal-Mart has been the most active among foreign supermarket operators keen to enter India’s $450 billion retail market. Opponents believe the entry of Wal-Mart and other such companies will put millions of small Indian shop owners out of business.
A government arm is also looking into allegations that the American retailer flouted the country’s law by entering the supermarket business even before India allowed foreign retailers in.
PTI and Reuters contributed to this story.
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First Published: Tue, Dec 11 2012. 12 59 PM IST
More Topics: Wal-Mart | Parliament | FDI | multi-retail | probe |
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