CVC probes bribery charges involving Wal-Mart

Wednesday, Nov 4, 2015,14:39 IST By Metrovaartha A A A

New Delhi | Wal-Mart has come under scanner of the Central Vigilance Commission which has summoned country head of the retailer amid allegation that it gave bribes to government officials to get customs clearances and obtain permits to set up stores in India.

The probe, which is the first of its kind where the CVC has taken a suo-moto cognisance of a media report, will include screening of the documents of the company. Some observations have been made that Wal-Mart gave some amount to government officials here.

It is our duty to look into it, Vigilance Commissioner T M Bhasin said. He said the Commission has taken suo motu cognisance of it and summoned country head of Wal-Mart here. We have asked them to submit details to us by November 15, Bhasin said. It is for the first time that the probity watchdog has started investigation involving a private company.

The CVC’s move is based on a recent report by Wall Street Journal which said to have found evidence of Wal-Mart Stores Inc allegedly paying thousands of small bribes to local officials in India to get customs clearances and obtain real-estate permits.

Vast majority of payments were below USD 200 (about Rs 13,100 at current exchange rate) and some were as low as USD 5 (Rs 330) but together totalled millions of dollars, the report has alleged. The world’s largest retailer entered India in 2007 through a supermarket joint venture with Bharti Enterprises but split up in 2013. Since then, it is mostly focused on wholesale business.

Wal-Mart is likely to face charges of violating the US Foreign Corrupt Practices Act due to these payments, the paper had said, adding the charges in India are unlikely to amount to a large fine as FCPA penalties are connected to profits the alleged misconduct generated. Wal-Mart did not respond to queries sent to them.

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