Walmart lobbying probe under PMO initiative

The government has, at the initiative of the Prime Minister's Office (PMO), ordered an inquiry by the corporate affairs ministry into the lobbying activities of Walmart, the American retail giant. This is a departure from the government's earlier announcement that a judicial probe would be ordered.

The PMO, through a letter from Parliamentary Affairs Minister Kamal Nath, has asked the corporate ministry to probe "whether Walmart undertook any activities in India in contravention of any Indian law". Also, the letter to corporate affairs secretary Naveed Masood said the ministry must inquire into recent media reports on disclosures of Walmart before the US Senate regarding their lobbying. Masood could not be reached for comment.

The ministry has been given three months for sending its report to the PMO. The draft terms of reference for the inquiry were finalised in discussion with Finance Minister P Chidambaram, sources said.    

"Since we have not seen this, we are not in a position to comment," a Bharti Walmart spokesperson said.

Walmart spent $25 million towards lobbying since 2008, to gain access to foreign markets, including India, the $444-billion chain told the US Senate in late 2012, The matter had rocked the winter session of Parliament, with MPs from Opposition parties demanding a probe. The government had in September permitted up to 51 per cent foreign direct investment (FDI) in multi-brand retailing, thereby making way for international giants such as Walmart, Carrefour and Tesco to set up shop in India.  

Bowing to the Opposition demand, the government had announced in December that an inquiry would be conducted into the matter, with a retired judge leading the probe. 

Bharti Walmart had earlier said, in a statement, that all organisations which spend more than $11,500 annually on lobbying activities and employ at least one lobbyist must, by US law, register and file quarterly reports. The company had said, "The allegation that a routine US lobbying disclosure form reflects improper conduct on our part in India is false. This disclosure has nothing to do with political or governmental contacts with India government officials."

According to Bharti Walmart, "It shows that our business interest in India was discussed with US government officials --- along with 50 or more other topics -- during a three-month period." 

Walmart signed a 50-50 joint venture with Bharti Enterprises in 2007 and set up its first cash and carry store in the country in 2009, after which the American chain started lobbying in the US for greater access in the India market, its filings before the Senate show. Lobbying for "greater market access" was undertaken by Walmart as it wanted to start its supermarket stores in the country but FDI in multi-brand retailing was not permitted till the cabinet decision of September 2012.

In the company's 2008 fourth quarter filing with the US Senate, it listed "enhanced market access for investments in China and India" as part of trade lobbying. From then on, it has been consistently lobbying for the India market, except during a few quarters in 2009, the filings show.

Walmart is among thousands of American companies making lobbying disclosures to the US Senate. In a year, as many as 20,000 filings are found on the website of the House of Representatives.

A US state department official had earlier told the media: "With regard to lobbying in the United States, I think you know that the Lobby Disclosure Act of 1995 and the Honest Leadership and Open Government Act of 2007 require lobbyists for any companies or other organisations to disclose their activities in a periodic report to the Congress."

Walmart is separately investigating alleged corruption in the organisation related to the India market, among other regions. Bharti Walmart has suspended five executives on this count and investigations are still on.