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It is interesting that India’s Enforcement Directorate, the agency that looks into foreign exchange violations, has said Wal-Mart Stores Inc. and its erstwhile Indian partner Bharti Enterprises Ltd didn’t break any laws when the former invested (through convertible debentures) in Cedar Support Services Ltd, the latter’s subsidiary that was also the holding company for Bharti Retail Ltd, which ran a chain of supermarkets.

The disclosure, which was made, not through an official announcement but through leaks to the media, comes just around 10 days after the two companies announced they were breaking their partnership, Bharti Wal-Mart, that runs a chain of wholesale or cash-and-carry stores in India, and that Bharti Enterprises was buying back the debentures Wal-Mart held in Cedar.

Bharti Retail has said it will expand its retail presence, as Mint reported on 10 October.

Wal-Mart has said it will expand the wholesale business and also work with the Indian government on creating what it terms a more “conducive" investment for multi-brand retail (or supermarkets and the like).

As the Mint story pointed out, there is buzz that Wal-Mart could either be looking for a new partner or downsizing its India presence.

Some analysts see the Enforcement Directorate’s move to clear Wal-Mart as something that will reassure not just the American retailer but also other foreign investors.

Still, a post-mortem of the breach in rules that never was is warranted—if only to understand how things work (or don’t) in India.

The Wal-Mart, Bharti joint venture was formed in 2007.

Soon after, Wal-Mart also started running EasyDay supermarkets and stores, although, at the time, Indian law didn’t allow foreign investment in multi-brand retail.

Around the same time, Wal-Mart invested $100 million in Cedar.

Indian law, at the time, wasn’t explicit on whether such investments in holding companies, especially if made through convertible debentures, amounted to foreign direct investment in their subsidiaries (if it did, it would have meant that Wal-Mart had an investment in Bharti Retail, which wasn’t allowed).

To be sure, India’s commerce ministry did, through a press note, seek to clarify that such investments were not tantamount to foreign direct investment (FDI), but, strangely, this press note was not notified, which meant that its status was unclear.

Meanwhile, some politicians and reporters, likely fed the report by Bharti’s corporate rivals (Mint too received the papers), raised the issue.

The commerce ministry couldn’t do anything because of the press note that wasn’t yet a rule. Nor could the Reserve Bank of India.

The two bounced around the issue before passing it on to the Enforcement Directorate. Both Bharti and Wal-Mart have always maintained that their investments were legal at the time they were made.

Meanwhile, in September 2012, India allowed FDI of up to 51% in supermarkets.

By then, Wal-Mart’s Indian operations had other problems and the company’s joint venture with Bharti was also fraying, partly because the Mittals who run Bharti were not happy with Wal-Mart’s bureaucratic methods, especially given the pace at which they had scaled up their telecom business, Bharti Airtel Ltd.

Now, it emerges that the Enforcement Directorate believes there was no violation of India’s foreign investment rules by Wal-Mart when it invested in Cedar.

So, in many ways, the story that was ended up being a story that wasn’t.

Then, as any good reporter will maintain, that’s a story in itself.

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