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Probe Into Walmart To Take More Time: ED

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On 1 March, the Centre submitted before Madras High Court that it would take "some more time" for the conclusion of the probe by Enforcement Directorate into alleged violations of forex laws by the American retail giant Walmart in its investment in two Indian firms. ED has issued summons to Bharti Wal Mart officials for clarifications in connection with the documents received from the concerned companies and government departments, an affidavit filed by a top ED official said.

"..investigations which are being conducted by ED would take some more time to be concluded as the documents received from the concerned companies and the concerned government departments are being examined," ED Deputy Director Rajeswar Singh said in the affidavit.

ED has also made reference to concerned government departments to obtain material information and record relating to receipt of Foreign direct investment (FDI) by the said companies, Singh said in response to a public-interest litigation (PIL) by a traders association.

The Directorate has taken up appropriate investigation under the Foreign Exchange Management Act, 1999 (FEMA) into the alleged contravention of FEMA by Cedar Support Services Ltd, Bharti Wal Mart Pvt Ltd and Bharti Retail Ltd, relating to receipt of Foreign Direct Investment (FDI) in multi-brand retail trading by Bharti Retail Ltd, he said.

The agency was investigating the receipt of FDI of Rs 455.80 crore by Cedar Support Services Ltd and Rs 139.33 crore by Bharti Wal Mart Pvt Ltd, the affidavit said.

The probe would also go into the receipt of FDI as to whether the same was in conformity with the provisions of Secion 6(3)(6) of FEMA read with the Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000, Singh said.

Petitioner T Vellayan, President of Federation of Tamil Nadu Traders Association, has sought a direction to authorities to examine, investigate or consider investment by a subsidiary of multi-brand retail company WalMart in two Indian firms in March-April 2010.

The PIL submitted the union government had allowed FDI in multi-brand retail on September 14 last year before which it had been prohibited under FEMA and relevant rules.

It alleged that in March and April last year, Wal Mart Stores Inc, USA, through its subsidiary, in collusion with two Indian firms, illegally invested Rs 455.80 crore in multi-brand retail in India by masquerading it as for 'services sector.'

The Centre had in November last told the Madras High Court that ED was investigating the alleged investment of American retail giant Wal Mart in Indian companies, in violation of the provisions of FEMA.

When the matter came up for hearing before a division bench comprising Justices R Banumathi and K K Sasidharan today, ED filed its affidavit following which the petitioner's counsel said he has to get instructions.

At his request, the court adjourned the matter by one week.


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