Walmart probe: ED asks DIPP to clarify rules on FDI retail

official sources said.

The agency is probing alleged 8220;contravention8221; of forex rules in this case under provisions of Foreign Exchange Management Act FEMA on directions of the Reserve Bank.

The ED has decided to approach the DIPP after it studied replies sent by the American retail giant and its Indian partners.

Sources said that any penal action under FEMA laws could be taken or dropped based on the 8220;statutory policy8221; framed by the government.

8220;If required the agency and DIPP officials would sit across the table to take the probe forward,8221; they said.

The Rs 455.8 crore investment by Wal-Mart in Cedar Support Services Ltd,a subsidiary of Bharti Ventures,came under attack from CPI Rajya Sabha member M P Achuthan,who wrote to Prime Minister Manmohan Singh earlier saying it was 8220;illegal8221; and flouted FDI rules.

The ED,a central investigative agency mandated to probe violations under the FEMA and Prevention of Money Laundering Act PMLA,was asked by the RBI to check the alleged violations made by the US-based retail giant.

The probe would also go into the receipt of FDI as to whether the same was in conformity with the provisions of Secion 636 of FEMA read with the Foreign Exchange Management Transfer or Issue of Security by a person resident

outside India Regulations,2000.