Wal-Mart's Jain leaves 7 months after CFOs exit

Jun 26 2013, 23:51 IST
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SummaryWal-Mart said its president of India ops, Raj Jain was no longer with the company.

In a definite setback for Wal-Mart Stores, the retailer on Wednesday said that its president of its India operations, Raj Jain was no longer with the company. Wal-Mart has been among the most serious of global retailers wanting to set up shop in India it set up an office way back in 2006 but has so far run a wholesale cash and carry operation with Sunil Mittals Bharti Group. When India threw open the multi-brand retail space to foreign direct investment in September 2012, Wal-Mart had announced it would be opening stores.

The Bentonville, Arkansas-based company did not name a replacement, saying Ramnik Narsey, senior vice-president of Walmart International, would hold charge as interim leader for the firms India operations.

Jains exit, somewhat unexpected, follows that of Pankaj Madan, CFO of Wal-Marts India unit, who was suspended last November in the wake of potential violations of US anti-bribery laws. While the US firm continues its probe, Wal-Mart India is also under the scrutiny of the Indian government for having allegedly bribed officials. Moreover, the Enforcement Directorate is also investigation alleged violations of foreign direct investment norms by the company.

Jains departure, say industry sources, may have had to do with the several probes into Wal-Marts Indian operations. The ED was looking into an

investment of R455.8 crore made by Wal-Mart in Cedar Support Services, a subsidiary of Bharti Ventures and the holding company for Bharti Retail, which runs the front-end easyday stores.

The investment, made via compulsorily convertible debentures, was termed illegal and went against FDI rules under the Foreign Exchange Management Act and the Prevention of Money Laundering Act, CPI(M)s Rajya Sabha member MP Achutan alleged in a letter to the Prime Minister late last year. Separately, a panel headed by Mukul Mudgal, a former chief justice, has investigated claims that Wal-Mart broke rules as it lobbied to enter the countrys retail market.

In November, Wal-Mart launched an internal probe into possible violations of US Foreign Corrupt Practices Act in Brazil, China and India which follows an earlier probe in Mexico.

As part of the probe, Madan, the CFO of its India unit was suspended. In a separate statement on Wednesday, Walmart said that Madan remains on leave. We are committed to conducting a complete and thorough investigation and it would be inappropriate for us to comment further until we have finished the investigation, the company said

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