Cabinet may take final call on Walmart lobbying case

Jul 29 2013, 18:04 IST
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(Reuters) (Reuters)
SummaryThe findings of a one-man panel set up to probe retail giant Walmart's lobbying activities.

The findings of a one-man panel set up to probe retail giant Walmart's lobbying activities may soon go to the Union Cabinet, which would also look into suggestions made by various ministries in this regard. Pursuant to submission of this probe report, an Action Taken Report (ATR) has been prepared after taking into account suggestions made by the Corporate Affairs Ministry, the Ministry of External Affairs and the Department of Industrial Policy and Promotion (DIPP).

The ATR has been sent by the Corporate Affairs Ministry for the Union Cabinet's approval and it would be tabled in the Parliament during the next session, along with the findings of the probe panel, sources said. While the contents of the ATR were not immediately known, there are talks about Indian government preparing to frame guidelines for lobbying activities. Lobbying is legal in the US and many other countries, where concerned companies and their registered lobbyists need to make quarterly disclosures about such activities. However, India has no such guidelines in place.

The government-appointed panel remained inconclusive on whether Walmart violated Indian laws in carrying out lobbying with US lawmakers to enter India's lucrative retail market. The panel submitted its report on May 18. In the wake of intense political pressure and heated debate in Parliament, the government in January had set up the one-man panel, headed by former Chief Justice of Punjab and Haryana High Court Mukul Mudgal. However, the inquiry remained inconclusive as the panel was not satisfied with the replies given by the US retailer on various issues, including on the exact amount spent on its India-specific lobbying activities. With the findings remaining inconclusive, the retailer may face another probe, while it is already being investigated by the Enforcement Directorate for other suspected violations.

Among others, the committee also looked into Walmart's lobbying activities with government officials in India. In the meantime, Walmart recently announced a sudden exit of Raj Jain, head of its Indian venture with Bharti group. This committee was set up after a political uproar over disclosure about Walmart's lobbying among the US lawmakers since 2008 for facilitating its entry into the Indian market. Walmart spent a total amount of USD 6.13 million (about Rs 33 crore) on lobbying for various issues, including on "discussions related to FDI in India", during 2012, as per the US Congressional records. It had been lobbying on India- related issues since at least

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