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India may take action against Walmart for alleged lobbying and bribing of its officials, if disclosures made by the American company before the US Congress indicate violation of Indian laws.
The Mukul Mudgal panel has said in its report that as and when an adverse report on disclosure indicating violation of Indian laws is made by Walmart, the Government should start its investigations.
The panel’s report accessed by Business Line stated that since Walmart had not responded to its summons, the investigations carried out by India should be on the basis of disclosures made in the US Congress, if they indicate violation of Indian laws.
The panel has submitted its report to the Cabinet Committee on Economic Affairs (CCEA). The CCEA is now expected to send the report to Parliament after acknowledgment.
Following protests and pressure from the Opposition in Parliament, subsequent to Walmart’s disclosure to the US Senate that it had spent $25 million on lobbying in the US to gain entry into India, the Government had set up the single-member panel under Mudgal, a retired judge of the Punjab and Haryana High Court, to look into the complaints. Lobbying is not illegal in the US.
The Department of Industrial Policy & Promotion (DIPP), in its observation on the report, noted with concern that Walmart had not responded to public notices issued by the Mudgal committee.
Walmart’s Asia-CEO Scott Price had clarified last year that this disclosure had nothing to do with political or Governmental contacts with Indian officials. The Government, however, decided to go ahead with the investigations giving in to pressure from Opposition parties. With the company deciding to suspend its Chief Financial Officer and the entire legal team in India last year as part of its on-going internal investigation into potential violations of the US Foreign Corruption Practice Act (FCPA), its image took a beating.
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