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Bharti Walmart Suspends CFO, Others

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The Indian joint venture of Wal-Mart Stores Inc, Bharti Walmart, has suspended five people, including CFO Pankaj Madan, as part of an ongoing global investigation by the US retail giant against alleged corrupt practices, sources said. This development could hamper India's efforts to open its domestic supermarket sector to foreign investment.
 
Wal-Mart, the world's largest retailer, said last week it has opened internal inquiries or investigations into bribery allegations in Brazil, China and India, which follows an earlier probe in Mexico.

"We have inquiries or investigations regarding allegations of potential FCPA violations in a number of foreign markets where we operate, including but not limited to Brazil, China and India. This is in addition to the ongoing investigation in Mexico," the company had said.

"The suspension is a routine global practice followed in such investigations," an official at the Indian unit said, declining to be named. "We cannot carry out a fair investigation when the people we are investigating are in office. What we must not forget is they are innocent until proven guilty," the person said.

It is understood that more heads may roll as the investigation progresses in the coming days in the company, which has now decided to put a halt to opening new cash and carry wholesale stores in India pending the probe.

Confirming the suspension, a Bharti Walmart spokesperson said:" We are committed to conducting a complete and thorough investigation. It would be inappropriate for us to comment further until we have finished the investigation."

Madan and four out of the five-member legal team of Bharti Walmart were suspended on 20 November as part of the ongoing investigation over allegations of corrupt practices against the company in foreign markets, including India, a source said.
 
Indian authorities are also investigating claims that Wal-Mart violated foreign exchange rules when it invested $100 million in a domestic unit owned by its wholesale joint-venture partner.
 
Indian opposition parties and allies within the Congress party-led coalition government in New Delhi are opposed to allowing global giants like Wal-Mart into the retail sector, saying to do so would drive small traders out of business.
 
After several delays, the government in September finally allowed foreign direct investment in the sector to revive stalled reforms and help halt a slide in economic growth.
 
On 22 November, when the Indian parliament opened for its winter session, opposition politicians demanded a debate and vote on the policy decision and have threatened to halt parliamentary proceedings.
 
(Agencies)