Wal-Mart Stores has insisted it is co-operating with the Indian government after its Asia division chief was questioned by a judge last week over alleged illegal lobbying activities.
Wal-Mart Asia chief executive Scott Price appeared before retired judge Mukul Mudgal on Friday, who probed the CEO over allegations from opposition parties that the retailer’s lobbying activities in the US indicated bribery of Indian officials. The opposition claims Wal-Mart’s lobbying has violated Indian law.
The country’s government appointed Mudgal to probe the allegations, following pressure from opposition parties over the group’s lobbying activities.
According to The Wall Street Journal, the Mudgal-led committee will await a response from Price on its questions before making a decision on a further meeting.
Wal-Mart has been attempting for some years to persuade India to relax the rules prohibiting foreign investment in consumer-facing multi-brand retail channels. But while Wal-Mart disclosed last year it spent US$25m on lobbying US lawmakers over the past four years, there have been reports of bribery of Indian officials.
A spokesperson for the US retail giant said today (25 March) the company had had discussions with US officials about a range of trade and investment issues that impact its businesses worldwide. All companies that meet certain time and expenses thresholds are required to disclose the details, under US law, the spokesperson added.
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However, he added that the disclosures have “nothing to do with political or governmental contacts with India government officials”. The report, the spokesperson claims, was a standard detail of lobbying activity, which is legal in the US.
Wal-Mart claims the disclosures show its business interest in India was discussed with US government officials – “along with 50 or more other topics during a three-month period”.
“Walmart is committed to the Indian market. We remain excited about the opportunity to grow our business in one of the world’s most vibrant economies, expand opportunities for farmers and help lower the cost of living for families in India. We value the relationship we have with customers in India and are committed to doing things the right way, every day,” the spokesperson said.
India’s government is in the process of relaxing retail investment restrictions. In September last year, it introduced proposals allowing foreign companies to own up to 51% of multi-brand retail businesses.
Wal-Mart, which has a joint venture wholesale business in India with Bharti Enterprises, said in October it was in discussions to replicate this relationship in the retail channel. Tesco also hinted earlier this year that it could potentially step-up investment in the region if conditions become more favourable.