No wonder that Walmart had
entered India's front-end multi-brand retail business two-and-a-half years
before the government actually lifted the ban on foreign investors. It
is not surprising to note that the Prime Minister's Office (PMO) has forwarded
to the Department of Industrial Policy and Promotion (DIPP), an allegation by
CPI Rajya Sabha member MP Achuthan that raised specific questions on Wal-Mart's
R456-crore investment in a company called Cedar Support Services through
compulsorily convertible debentures (CCDs) in March 2010. Multinational corporations like
Walmart generally do not respect the rules and regulations of the host
countries, particularly the developing countries. Reports suggest that they
often violate the laws and indulge in unlawful activities .For instance, when the foreign
banks such as Citi Bank and HSBC entered India, they agreed to adhere to the
rules and regulations imposed by Reserve Bank of
India and strictly follow the laws of the land. But after stepping into Indian
soils they often violated the BRI guidelines as well as rules and regulations,
besides breaking Indian laws. Quite often they indulged in criminal and
unlawful activities. In their efforts to
broad base their activities and customer base such foreign private banks,
through advertising, propaganda and persuasion, had brought into their net a
large section of the urban middle class people. In fact, millions of unwary
urban middle class households, who have a bundle of unmet needs, were drawn to
enter into a borrowing spree. Many of them were chained to the perpetual wheel
of borrowing and indebtedness, through the issue of credit cards and leasing
and hire purchase. The saddening aspect of such a trend is that many households
had undergone extreme troubles and tribulations to meet the monthly commitment
for the repayment of hire money or other obligations. Such foreign banks often
adopted unlawful and criminal tactics to realise the payment due from the
distressed borrowers. Some of the techniques followed by them are unknown
in their countries of origin. The modus
operandi is to engage “collection agents” who, in turn, with the help of
`paid goondas’ visit the customers at the office premises, residences and at odd places at odd
times, including during midnight and
early mornings, and intimidate them, including women, children and the aged.
Sometimes they forcefully take away household articles, jewels and other
immovables. There are also instances in which they have obtained forcefully
signatures of the customers for the sale of their immovable properties. In one
instance, in Mumbai, one such agent of Citibank N.A. demanded “the kidney of a
customer” in lieu of repayment of loan.
In another incident in chennai
the goondas engaged by one such agent of the Citibank N.A. abducted a young
entrepreneur from his residence, kept him in custody and beaten him mercilessly
causing grievous injury. It was reported
that but for the intervention of the Chennai Police Commissioner, he would have
been tortured and done away with.
Walmart
currently partners Sunil Mittal-led Bharti Enterprises and it has stated that
the partnership will continue. Apart from that Walmart is reported to be
planning a series of partnerships with small and mid-level suppliers in India
across product categories to create a big list of private label brands that
will be priced substantially lower - as much as 10-15% - than established
products and brands. The move is part of the company's strategy to go deeper
into the into those states which do not allow Walmart to set up shops. It also
signifies that Walmart is going against its original commitment that that will
directly procure from the farmers and hence the farmers will get better price.
According to Mr. Jain 95% of what they sell will procured from within the
country. But what is the guarantee that Walmart will continue to do so. In
fact, in other countries, including the United States, Walmart is selling cheap
Chinese goods.
Walmart
has already has a joint venture with Bharati. It is alleged that Bharti-Walmart
is illegally carrying out multi-brand retail trade despite being permitted only
to carry out wholesale cash-and-carry or wholesale trade in the country. On the
basis of the suit filed by environmental activist Vandana Shiva, the Delhi High
Court sought replies of the Centre, Bharti-Walmart and Bharti Retail on a plea
for a probe against the firms for allegedly carrying out retail trading in the
multi-brand sector in violation of India’s existing FDI policy. Thus, even
before getting permission to operate, Walmart has violated Indian rules and
regulations and has unlawfully involved in multi-brand retail trading. Will
Walmart and other multinational retail giants respect Indian laws once
permission is granted to operate multi-brand retail stores?
Dr.C.Murukadas, Hindustan Times, October 12, 2012
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