• Graft inquiry: Walmart gets limited reprieve from Delhi HC against CVC

    Walmart Stores Inc won a limited reprieve from Delhi High Court last week, having approached it over the Central Vigilance Commission (CVC) seeking to initiate criminal proceedings against the local unit of the retail giant for allegedly delaying an inquiry into possible bribery.

    In his April 5 interim order, Justice Rajiv Sahai Endlaw said “no criminal complaint as threatened be filed against the petitioner/its officials till the next date of hearing”. The case is listed for May 5.

    Walmart told the court it had been cooperating with the inquiry even though it doesn’t believe CVC has jurisdiction over the matter. The court order sought to clarify this, while adding that the origin of the matter a newspaper report – was a crucial factor.

    The relevant section of the CVC Act empowers the agency to investigate complaints against executives under the Prevention of Corruption Act, it said. However, the summons of October 29, 2015, “does not refer to any complaint but to allegations of bribery of Indian official by petitioner reported in the Wall Street Journal.

    Prima facie that would not constitute a ‘complaint'”. The order said the CVC had in a March 29 letter “asked the chief executive officer (CEO) of the petitioner (Walmart India Pvt Ltd) to furnish the information mentioned therein and threatened the petitioner with criminal case for noncompliance thereof “.

    CVC had started the inquiry in October following the newspaper report which said the US retail giant had spent millions of dollars – mostly in small payouts of $5 to $200 – to bribe government officials in India to obtain Customs clearances and permission to open and run stores.

    A person with knowledge of developments said Walmart had lately been indulging in delaying tactics, “compelling” the anti-corruption watchdog to consider registering a criminal complaint. Vigilance Commissioner TM Bhasin could not be reached despite repeated calls to his office.

    A Walmart India spokesperson said the company wouldn’t comment on the case. “As you may be aware, the matter is sub judice and hence it would not be appropriate for us to comment on this,” the person said. “Walmart is committed to operating in a responsible and legal manner, wherever we do business. And compliance with anti-corruption laws in the US and all international markets including India is a key priority.”

    The Bentonville-based giant, which operates a chain of wholesale stores in India, was mired in corruption allegations in 2011 when it emerged that its Mexico unit had bribed government employees to help the company’s biggest overseas subsidiary grow faster.

    The Mexico scandal prompted Walmart to review and strengthen its anti-corruption compliance programme in various countries including India. Walmart shifted its focus from doing business in the country to seeking out possible violations of the Foreign Corrupt Practices Act, a US law that prohibits American listed companies from bribing government officials abroad.

    Walmart subsequently unwound its ties with partner Bharti Enterprises in October 2013. Currently, Walmart runs the wholesale-store chain as a fully-owned subsidiary. Bharti merged the Easyday chain in May 2015 with Kishore Biyani’s Future Group. 

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