Wal-Mart’s Indian operations had hogged the limelight last year when the country actively debated whether to allow 100% FDI in multi brand retailing or not. The Indian arm of the world’s largest brick-and-mortar retailer is in the news again, albeit for the wrong reasons.
A probe into allegations of corruption practices at Wal-Mart Stores in India indicate that the company officials may have paid thousands of small bribes to get a go-ahead on various issues from government officials.
The bribes were paid to get custom clearances or get hold of real-estate permits. While the quantum of bribe paid on different occasions is purportedly pretty less, there are umpteen occasions when such bribes were paid.
“The vast majority of the suspicious payments were less than $200, and some were as low as $5, the people said, but when added together they totaled millions of dollars,” reports The daily.
Wal-Mart entered India through a joint venture with Bharti Enterprises but severed the partnership in 2013.
The Indian operations of Wal-Mart are still not profitable and therefore the imposition of penalties under the Foreign Corrupt Practices Act (FCPA) of the United States is unlikely.
Wal-Mart (India) incurred a loss of INR 232 crore in the fiscal year 2014.
The federal authorities had carried out similar investigations at Wal-Mart Mexico. The scrutiny however found no major offenses as was earlier suspected.
