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Almost three months after the government announced a probe committee to look into American retail chain Walmart's lobbying activities for gaining access to the Indian market, the group's Asia president and chief executive officer, Scott Price, deposed before the panel today.
Mukul Mudgal, former chief justice of the Punjab and Haryana High Court, who's doing the probe, has sought further details from Walmart executives by April 9.
The government had set a deadline of April 30 for completing the probe into the matter, which had rocked the winter session of Parliament. After media reports on Walmart disclosures before the US Senate, that it had spent $25 million on lobbying with US lawmakers over a period of four years on various issues, including gaining enhanced market access for investment in India, Opposition parties had asked for an investigation into the matter. This came at a time when already there was much uproar against the government allowing 51 per cent foreign direct investment in multi-brand retailing.
Apart from officials of Walmart, the government-appointed committee also met representatives of Bharti, the joint venture partners for the American chain's cash and carry or wholesale business in India. Walmart and Bharti intend to extend their tie-up for the retail foray, too. The Mudgal committee is examining whether Walmart undertook any activities in India in contravention of any Indian law.
"After discussions, it was decided to await responses of the above companies to the queries raised by the committee," the corporate affairs ministry said. The ministry is providing administrative support to the panel.
The committee had also sought information from the general public on the matter and is currently examining those responses.
Even after the controversy, the company has spent $1.48 million on lobbying for various issues, including on "discussions related to FDI in India" during the last quarter ended December 31, 2012. It has paid a total of $6.13 mn on the matter during 2012.
When queried, a Walmart India spokesperson said the company was cooperating with the government and the Mudgal committee. "Under US law, on a quarterly basis, all companies which meet certain time and expenses thresholds, are required to disclose issues and expenditures spent in connection with contacts with the United States government, including staffing cost, association dues, and payments to consultants," the spokesperson said. She added "this is not unique to Walmart". All organizations which spend more than $12,500 per quarter on lobbying activities and employ at least one lobbyist must register and file the quarterly reports, according to American law.
"Our business interest in India was discussed with US government officials, along with 50 or more other topics during a three-month period.Our Washington office naturally had discussions with US government officials about a range of trade and investment issues that impact our businesses in the US and worldwide and identified those in accordance with the law," the spokesperson added.
