An Indian government probe has cleared Walmart of breaching foreign investment rules when it launched in 2010.
India’s Finance Ministry has been investigating Walmart over allegations that it violated Indian rules when it purchased debentures worth $100 million from Cedar Support Services, the holding company of Bharti Retail, which runs supermarket chain Easyday, in 2010. Walmart and Bharti agreed to convert the debentures into 49 per cent stake after a three-year lock-in.
The US retailer was accused of violating domestic laws since FDI in multi-brand retail has not yet been allowed by the government that time.
But an official familiar with the probe said that the ministry has concluded that the deal between Walmart and Bharti was in line with central bank rules and other regulations enabling indirect investments.
A spokesperson from Walmart said that the company had cooperated with the investigators during the probe.
“We are in compliance with India’s FDI guidelines,” said the spokesperson.
Earlier, Walmart and Bharti ended their six-year old joint venture, which operates 20 wholesale stores in India under Best Price Modern brand. Walmart will then wholly own and operate the wholesale stores.
