The Indian joint
venture of Wal-Mart Stores, Inc.(NYSE:WMT) Stores has reportedly suspended its
Chief Financial Officer and other workers as it is probing into alleged
violations of US anti-bribery regulations. This move is likely to hamper
India’s attempt to open its domestic supermarket industry to foreign
investment.
The largest retailer in
the world, Wal-Mart said last week that it has started internal investigations into
bribery accusations in nations like China, India and Brazil.
An official from the
Indian unit, who has requested anonymity, has said that the suspension is a
protocol that is usually followed in investigations as such. The company cannot
execute fair judgment when the people, who are being investigated, are present
in office. It is not to be forgotten hat until the investigation finds anyone
guilty, everyone is innocent.
A spokeswoman for the
joint venture has confirmed suspensions and has mentioned that the venture is
intended to conduct a complete and meticulous investigation. Bharti Enterprises
is the partner of Wal-Mart in this venture.
Indian officials are
also probing into claims that Wal-Mart has violated foreign exchange regulations
while putting down an investment of $100 million in a domestic unit that is
owned by its wholesale joint-venture associate.
Opposition parties in
India and allies within the Congress party in New Delhi are opposed to letting
international giants like Wal-Mart into the retail industry. They believe that
doing so would drive small traders out of business.
After a number of
delays, the government has eventually allowed foreign direct investment in the segment
in September, with a view to revive stalled reforms and help halt a slip in
economic development.
The Indian parliament
opened its winter session on Thursday. Opposition politicians have demanded a
debate and vote on the decision of policy. They have also threatened to stop
parliamentary proceedings if their demands are not met.
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