RBI has also referred alleged violation of the FEMA to the ED for investigation in regard to both Bharti Walmart and e-commerce venture Flipkart Online Services
New Delhi: The Reserve Bank of India (RBI) has "not taken on record" the documents filed for investment of Rs455 crore by Wal-Mart into Bharti group company Cedar Support Services and alleged Foreign Exchange Management Act (FEMA) violation in the matter has been referred to the Enforcement Directorate (ED), reports PTI.
"The form FC-GPR filed for issuance of the compulsorily convertible debentures (CCD) has not been taken on record by the RBI to ensure that the CCD are FDI compliant instruments and for the purpose certain information has been called for from the company," Minister of State for Commerce and Industry S Jagathrakshakan said in a written reply in the Rajya Sabha.
He said inward remittance of Rs455.80 crore into Cedar Support Services was reportedly brought in by Wal-Mart Mauritius Holdings Co Limited on 29 March 2010.
However, the documents for issuance of the CCDs filed with the RBI were "not taken on record by the central bank to ensure that the CCDs are FDI-compliant instruments and for the purpose certain information has been called for from the company," the minister said.
The RBI has also referred alleged violation of the FEMA to the Directorate of Enforcement for investigation in regard to both Bharti Wal-Mart and e-commerce venture Flipkart Online Services.
Flipkart is under the scanner for allegedly flouting foreign direct investment (FDI) rules which allow e-commerce companies with foreign investment to carry out only business-to-business (B2B) transactions but not business to consumer (B2C) transactions by creating complex structures that may not be permissible.
Meanwhile, the government today announced a time-bound inquiry by a retired judge into reports of lobbying by retail giant Wal-Mart to gain entry into India bowing to opposition pressure.
The issue of retail giant Wal-Mart lobbying in the US for access to Indian markets has created storm in Parliament with several parties demanding probe into the issue.
UPA's outside supporters RJD and SP, which last week bailed out the ruling coalition in FDI in retail matter, were among those demanding a thorough probe into reports that money was spent in India.
Wal-Mart had, in its disclosures to the US Senate, said it had spent $25 million over four years for various lobbying activities, including for gaining access to Indian markets.
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