India probe into Wal-Mart investment moves to cbank - sources


MUMBAI/NEW DELHI, Oct 18 (Reuters) - An investigation byIndian authorities into whether Wal-Mart Stores Inc violated local investment rules in 2010 has been referred to thecountry's central bank, officials familiar with the matter said.

Last year, the Reserve Bank of India asked the enforcementdirectorate of the finance ministry to look into whether theworld's largest retailer broke foreign exchange rules when itinvested $100 million in an Indian consultancy that also runssupermarkets, sources told Reuters last year.

Wal-Mart, which recently broke up its joint venture in Indiaand said it will independently own and operate its business inthe country, has said it has complied with Indian regulations.

The investment was made before the government opened thesupermarket sector to foreign companies.

Officials said the enforcement directorate has passed alongits findings to the central bank.

"The ED (enforcement directorate) has investigated theWal-Mart case and has forwarded its report to the RBI for adecision by the RBI in the matter," said an enforcementdirectorate official who is not authorised to speak to the mediaand declined to be identified.

Another official said: "They have completed theirinvestigation and sent the RBI papers, and now the RBI will doits own examination on whether Wal-Mart violated foreignexchange rules."

A Wal-Mart spokeswoman said the enforcement directorate hasnot yet released its findings, and "so we have not seen theresult of its review and cannot comment."

India allowed foreign companies to set up majority-ownedsupermarkets in the country in September 2012, but no companyhas so far applied to enter due to lack of clarity around theentry rules.

The RBI declined to comment.

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