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One-man commission to investigate charges of Wal-Mart India lobbying

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SummaryAs promised in the Parliament in December, the government will put in place a one-man commission under the Commission of Inquiry Act, 1951, to probe allegations that American retail giant Wal-Mart had indulged in lobbying activities in India.

As promised in the Parliament in December, the government will put in place a one-man commission under the Commission of Inquiry Act, 1951, to probe allegations that American retail giant Wal-Mart had indulged in lobbying activities in India. The Union Cabinet cleared a proposal to this effect on Thursday. Under the Act, it is obligatory on the government to table the probe report and the action taken report in Parliament.

The commission will be headed by a retired Supreme Court or High Court judge. The terms of reference include probe into “recent media reports regarding their lobbying activities” and “whether Wal-Mart undertook any activity in India in contravention of any Indian law,” an official said.

Wal-Mart has consistently denied involvement in any wrongdoing.

The commission will also inquire into reports of Wal-Mart spending $25 million (R125 crore) towards lobbying activities in India since 2008 and whether these breached Indian laws. The commission will submit its findings within 90 days of its constitution.

The Cabinet note to this effect was circulated for inter-ministerial consultations recently by the corporate affairs ministry. Corporate affairs minister Sachin Pilot said on Thursday that his ministry was in the process of setting up the commission.

The move comes over a month after the Parliament’s Winter session where opposition parties disrupted proceedings alleging wrongdoings by Wal-Mart and wanted to know who were paid the reported amount of R125 crore mentioned by the company before the US Congress.

It was in November last year when Bharti Walmart, a 50:50 joint venture of Wal-Mart and Bharti Enterprises, that operates 18 wholesale stores in India, said that it had suspended five of its executives, including the chief finance officer pending the outcome of its inquiry.

Wal-Mart had said at the time that its internal inquiry will be to gauge potential violations of the US Foreign Corrupt Practices Act.

However, as soon as media reports were out in India regarding the disclosures of Wal-Mart’s lobbying spends, the US administration defended the global retail giant stating there were no violations by the company according to the US laws. “On the US side, I don’t have any reason to believe that we have a violation of US law here. With regard to the Indian side, I’ll refer you to them,” state department spokesperson Victoria Nuland had said on December 11, 2012, categorically dismissing allegations by Indian opposition parties in this regard.

According to the US official, the Lobby Disclosure Act of

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