Wal-Mart's India joint venture suspends executives
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MUMBAI, India -- Wal-Mart's Indian joint venture has suspended several senior executives and delayed the opening of some stores in the country as part of an internal bribery investigation, the company said Friday.
It is the latest in a series of setbacks for the retail giant's international operations and comes at a particularly sensitive time here because Indian policymakers just recently allowed foreign retailers like Wal-Mart to open stores in the country.
In a statement, Bharti Walmart, a 50-50 joint venture between the Indian conglomerate Bharti Enterprises and Wal-Mart, said it had suspended "a few associates" to ensure "a complete and thorough investigation." The Economic Times newspaper reported that the suspended employees included its chief financial officer and its legal team, but the company would not confirm that.
Earlier this month, Wal-Mart reported that it had expanded a bribery investigation to India, China and Brazil that was initially focused on Mexico. In April, The New York Times reported that executives at the company's Arkansas headquarters had suppressed an internal investigation that found credible evidence that its Mexican subsidiary had paid bribes in an effort to open more stores in that country.
Bharti Walmart operates 18 wholesale stores in India that are allowed to sell goods to other businesses like retailers, hotels and restaurants. Most of its stores are in northern India, but it had planned to expand in the coming months in the south and west. Those plans have now been delayed, but the company said in a statement that "we remain excited about the opportunity to grow our business in one of the world's most vibrant economies."
Wal-Mart's Indian joint venture also supplies about 200 supermarkets that are wholly owned by its partner's Bharti Retail and which operate under the brand Easyday.
In a separate inquiry, Indian authorities are looking into whether Wal-Mart violated foreign investment rules by giving Bharti Retail an interest-free loan of $100 million that would later convert into a controlling stake in that company. Both companies have maintained that they did not violate Indian investment regulations.
First Published November 24, 2012 12:00 am