CVC examines Wal-Mart's top executives over corruption charges

Top executives of the US-based world's biggest retailer Wal-Mart have been examined by Central Vigilance Commission (CVC) amid allegations that the company gave bribes to government officials to get customs clearances and obtain permits to set up stores in India.

The company officials have submitted balance sheets of past seven years and sought time to give some more documents required by the anti-corruption watchdog.

"We had summoned Wal-Mart's officials. Following which, two of their senior executives including company's India head have been examined. They have sought time till December 15 to submit more documents relevant in the case," Vigilance Commissioner T M Bhasin told PTI here today. The officials were examined recently.

It is for the first time that the probity watchdog has started investigations involving a private company.

Bhasin said that both the officials were summoned under the relevant section of the CVC Act which empowers it to summon and enforce the attendance of any person from any part of the country and requisition any public record or copy, among others.

Wal-Mart spokesperson in a statement said it responded to the CVC's summons.

"Wal-mart 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 is a key priority. That is why we work closely with third-party compliance experts on support and training, as we continuously review and strengthen our programs around the world.

"We know there is much interest in these issues, and we respect the work of the Vigilance Commission and responded to its summons and appeared before it. However, we are not in a position to comment further," the spokesperson said.

The move by the Commission came after it took suo motu cognisance of the matter. A report by Wall Street Journal had claimed 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.

A vast majority of payments were below USD 200 (about Rs 13,300 at current exchange rate) and some were as low as USD 5 (Rs 330) but together totalled millions of dollars, the report said.

Wal-Mart, which had entered India in 2007 through a supermarket joint venture with Bharti Enterprises, parted ways with the Indian partner in 2013, and shelved plans to open retail stores in the country and instead decided to become solely a wholesaler.

The investigations in India were part of a probe that included Wal-Mart's operations in Mexico, China and Brazil, over allegations of violation of US Foreign Corrupt Practices Act (FCPA), that bars bribing officials of foreign governments.

The retailer's Indian unit reportedly had suffered a loss of Rs 232 crore in 2014. Its revenue had dropped 32 per cent to Rs 2,992.7 crore in that year.

Wal-Mart, which was pushing for opening of the multi-brand retail sector in India during the previous UPA regime, was also involved in lobbying before the US Congress in this regard, Congressional disclosure reports have in the past few years said.

Wal-Mart is likely to face charges of violating the FCPA due to these alleged payments, the newspaper had said, adding that the charges in India are unlikely to amount to a large fine as FCPA penalties are connected to profits the alleged misconduct generated.