US retail giant Walmart announced on Wednesday that its country head, Raj Jain, has been replaced, without assigning any reason. His abrupt exit comes in the backdrop of wranglings on regulatory approvals for the company’s investments in entering India through joint ventures.
Jain joined the company in 2006 in Shanghai as president of Walmart International, and moved to India next year to head the local operations of Walmart in a joint venture with the Bharti group. He steered the ambitious retail empire through a difficult phase of lobbying to allow foreign direct investment (FDI) in the multi-brand retail segment.
Walmart said Ramnik Narsey, senior vice-president of Walmart International, will be interim head of the India unit. Jain could not be reached on his mobile phone, and the company declined to make Narsey available for comment.
“He (Narsey) is replacing Raj Jain, who is no longer with the company,” the company said in a terse statement.
Jain’s departure comes at a time when Walmart India is under probe by the Enforcement Directorate over an investment of Rs 455.8 crore in Cedar Support Services, a part of the Bharti Group. The investigation will determine whether this investment violated India's foreign direct investment (FDI) rules under the FEMA (Foreign Exchange Management Act).
Walmart India and Bharti Enterprises are a 50:50 joint venture partner in the country for cash-and-carry wholesale operations.
Both Walmart and Bharti Enterprises have rejected the allegations that there was any kind of violation of any rule and insisted that procedures were as per the “law of the land”.
Walmart’s investments in Cedar were made during Jain’s tenure as head of the company’s India operations.
“I’m not surprised,” Harminder Sahni, managing director at retail consultancy Wazir Advisors said, commenting on Jain’s departure. “Their (Walmart’s) biggest agenda was to get multi-brand retail clarifications in a manner that it is conducive. That has not come about.”
A graduate of the Delhi College of Engineering and an MBA from the Kellogg School of Business, Jain earlier served in Whirlpool Corporation after starting his career in Hindustan Lever, later renamed Hindustan Unilever.