Wal-Mart and Bharti Enterprises call off India JV
By Nandita Bose
MUMBAI (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote) and Bharti Enterprises are breaking up their Indian joint venture, leaving the world's biggest retailer to go it alone in a country where it has struggled to build a bigger presence.
Bentonville, Arkansas-based Wal-Mart, the world's largest retailer, will take over its Indian partner's 50 percent stake in Bharti Wal-Mart Pvt Ltd, which runs 20 wholesale stores under the Best Price Modern Wholesale brand.
However, if Wal-Mart wants to set up its own retail stores in Asia's third-largest economy, it will need to find another local partner to own 49 percent of the business under foreign investment rules that were eased last year.
Wal-Mart tied up with Bharti in 2007 and had been the most vocal proponent of prying open India's restrictive retail market to foreign supermarket operators.
But its growth in India has been hindered by still-evolving rules on foreign investment, an internal bribery probe, and, more recently, the faltering partnership with New Delhi-based Bharti, which Reuters reported in July.
Wal-Mart has not opened a wholesale, or cash-and-carry, store in India for about a year, despite earlier plans to open eight in 2013.
"Wal-Mart can now focus on getting its act clean in India and start afresh," Saloni Nangia, president for retail at Technopak Consultants.
Late last year, the company's Indian joint venture suspended employees, including the chief financial officer, as part of an internal investigation into bribery allegations in India and subsequently brought in a team of lawyers from a U.S. firm to strengthen compliance. Continued...