Wal-Mart spent $334 mn in severing ties with Bharti
US retail giant Wal-Mart, whichended 6-year-old joint venture with Bharti Enterprises last year, spent $ 334 million to break ties with the Indian firm.business Updated: Apr 28, 2014 18:53 IST
US retail giant Wal-Mart, whichended 6-year-old joint venture with Bharti Enterprises last year, spent $ 334 million to break ties with the Indian firm.
The Bentonville-based firm said it "paid and forgave" debt of approximately $ 234 million in connection with the agreements related to the Bharti retail business. Another $ 100 million was spent in buying out the Indian partner's stake from the erstwhile 50:50 cash-and-carry joint venture -- Bharti Walmart Pvt Ltd.
"During fiscal 2014, the company acquired, for $ 100 million, the remaining ownership interest in Bharti Walmart Pvt Ltd," the company said in its annual report.
It further said: "In connection with the agreements related to the Bharti retail business, the company paid and forgave indebtedness of approximately $ 234 million." In October 2013, Wal-Mart called off its six-year-old partnership with Bharti Enterprises and decided to operate wholesale stores independently in India.
Against the backdrop of these payouts, Wal-Mart recorded a net loss of approximately $ 151 million.
Earlier this month, Wal-Mart had announced to focus on wholesale business with plans to open 50 stores in the next four to five years to expand its footprint in the country. The company's announcement came a day after the BJP, most widely considered a favourite to come to power after the ongoing general elections, said it was opposed to FDI in multi-brand retail.
Wal-Mart has also been probing allegations of corrupt practice in its various overseas arms, including India. "Inquiries or investigations regarding allegations of potential FCPA (Foreign Corrupt Practices Act) violations have been commenced in a number of foreign markets where the company operates, including, but not limited to, Brazil, China and India," the company said.
Last October, the Enforcement Directorate, which probed alleged contravention of foreign exchange laws by Wal-Mart in its investments in domestic supermarket chain Bharti Enterprises, had found no violation of FDI guidelines by the US multinational retail giant.
The probe was regarding Wal-Mart's investment of $ 100 million in March 2010 in Cedar Support Services. Cedar, through a 100% subsidiary Bharti Retail, operates front-end retail stores under the brand name Easy Day.
It was alleged that Wal-Mart entered into the Indian multi-brand retail sector through its investment in Bharti Group even before the retail sector was opened up foreign investment.