CVC summons Walmart India head over bribery charges

Taking suo motu cognizance of a media report, the Central Vigilance Commission has summoned country head of Walmart amid allegations that it gave bribes to government officials to get customs clearances and obtain permits to set up stores in India.

The probe, which is the first of its kind where the CVC has taken a suo-moto cognizance of a media report, will include screening of the documents of the company.

"Some observations have been made that Walmart gave some amount to government officials here. It is our duty to look into it," vigilance commissioner TM Bhasin said.

"We have asked them to submit details to us by November 15," Bhasin said.

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

The CVC's move is based on a recent report by Wall Street Journal which said to have found evidence of Walmart Stores Inc allegedly paying "thousands of small bribes to local officials" in India to get customs clearances and obtain real-estate permits.

Vast majority of payments were below USD 200 (about Rs 13,100 at current exchange rate) and some were as low as USD 5 (Rs 330) but together totaled millions of dollars, the report has alleged.

The world's largest retailer entered India in 2007 through a supermarket joint venture with Bharti Enterprises but split up in 2013. Since then, it is mostly focused on wholesale business.

Walmart is likely to face charges of violating the US Foreign Corrupt Practices Act due to these payments, the paper had said, adding the charges in India are unlikely to amount to a large fine as FCPA penalties are connected to profits the alleged misconduct generated.

Wal-Mart did not respond to queries sent to them.

(Image credit: Reuters)