Walmart investigates Flipkart's compliance lapses and bribe paid to govt officials

In one of the major developments, US e-commerce firm Walmart has reportedly begun internal probe to look into Flipkart's regulatory and compliance lapses while setting up fulfilment centres in India.

The development is taking place after Walmart came to know that Flipkart does not have the necessary licences and permits for its warehouses.

In a few cases, government officials have been paid off to arrange the same, reported the BusinessLine quoting sources close to Walmart.

The lapses may prove costly for the e-commerce firm as it will make them liable under the FCPA (Foreign Corrupt Practices Act). Walmart reportedly has put all other projects like Logistics Park in Bengaluru on hold and address the lapses immediately.

It may be common for some of the Indian businesses to take business risk accruing from non-compliance, for US firms like Walmart, compliance with FCPA and other anti-corruption laws is a key priority, added sources quoted in the report.

In a response to Entrackr queries, SVP & Chief Corporate Affairs Officer, Flipkart Group, Rajneesh Kumar said that the report is baseless and there is no investigation whatsoever being done with regards to fulfillment centers.

We’re proceeding as per the plan and satisfied with the progress on the site selection process. In fact, we’re advancing well on our other large logistics hubs too in West Bengal as well in NCR, he added.

Earlier in March 2018, the home-grown firm had announced to build a logistics park, which will house several Flipkart Warehouses, will improve supply chain efficiency and reduce costs by deploying mechanised warehousing. It will also act as a freight aggregation and distribution hub by leveraging technology for intelligent transport systems.

Flipkart had planned to acquire 100 acres of land for the purpose. Once built, it is claimed to benefit the state with employment, rural development, growth in ancillary industries, trade, public revenues, and personal income levels.

By June, the first phase of the logistics park was expected to be completed.

Last year in May, Walmart had acquired 77 per cent stake in Flipkart for a whopping $16 billion.

The deal also came with serious questions over flouting FDI norms, predatory pricing and other concerns raised by vendors and sellers of the online marketplace platform.

Update: The post has been updated with Flipkart response.