Wal-Mart Pulls out Retail Joint Venture with India’s Bharti Enterprises
Wal-Mart has reached an agreement to finish its joint venture with Indian multinational company named, Bharti Enterprises on Wednesday. This indicates that giant U. S. retail continued to struggle, and thereby putting rules on foreign investment in India.
Bharti's stake will be acquired by Arkansas-based Wal-Mart (WMT, Fortune 500) in the undertaking.
Both companies said that they will now strike out on their own and will carry on independent retail operations.
The joint venture incorporated about 20 wholesale stores. However, as Wal-Mart became the target of several legal investigations, development had slowed in recent months. It focused on potential Foreign Corrupt Practices Act (FCPA) violations. The CFO of the Bharti venture was suspended by Wal-Mart last year. In last June, CEO Raj Jain departed.
The CEO of Wal-Mart Asia, Scott Price, told CNN last week that the company remains faithful towards the Indian market, particularly with hundreds of millions of consumers moving into the middle class over the next 20 to 35 years.
Price said," But what it requires is the ability for us to invest in a manner that is simple, that we can comply with the law and we can make shareholder returns".
In spite of earlier plans to open eight wholesale or cash-and-carry stores in India in 2013, Wal-Mart has not opened a single for about a year.