The CPI leader said he has also taken up the matter with the Enforcement Directorate and would decide on the future course of action after getting its response.

Walmart is in for more trouble as the Central Bureau of Investigation has found violation of RBI and FEMA regulations by the US-based retailer when it made its India entry with the Bharti group.

In a statement, CPI leader and Rajya Sabha member M.P. Achuthan said the CBI in a letter had communicated to him that the global retailer had violated regulations.

“The matter was analysed which reveals violation of RBI guidelines and FEMA regulations. Violation of FEMA regulations does not fall under the CBI purview and hence CBI cannot investigate the matter. The complaint has been closed at our end,” the CBI letter said. The issue is therefore being investigated by the Vigilance Officer of the Commerce Ministry.

The CPI leader said he has also taken up the matter with the Enforcement Directorate and would decide on the future course of action after getting its response.

Achuthan had last year written a letter to the Prime Minister seeking details of $100 million (Rs 455.8 crore) investment in the multi-brand retail sector without reporting it to the Reserve Bank of India first.

He said Walmart “masqueraded” the investment as FDI in services sector. He said, Walmart and the Bharti Group “connived together, schemed and hoodwinked the Government and the RBI”.

Walmart allegedly pumped in Rs 455.8 crore in a subsidiary of Bharti Ventures in 2010 via its Mauritius arm. Cedar Support Services Ltd (a subsidiary of Bharti Ventures) issued 45.58 crore compulsorily convertible debentures (CCDs) and flouted FDI rules.

In order to receive FDI directly under automatic route from Walmart, Bharti Group's investment and holding company, Bharti Retail Holding Pvt Ltd, had amended its “main objects” to enable it “to provide services in real estate consultancy design etc” and the name of the company was changed to Cedar Support Services Ltd, Achuthan alleged.

When contacted Walmart India spokeswoman said, “We are in compliance with India’s FDI Guidelines and, as we have stated, we have cooperated with the Government during this process. The Central Government has sought information and clarification that has been provided by us.”

bindu.menon@thehindu.co.in

(This article was published on July 19, 2013)
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