Company says Raj Jain quit of his own volition.
In a surprising turn of events, Raj Jain, CEO of Walmart India, left the company on Wednesday. He had joined the company in 2006. A year later, he was named the CEO.
Walmart officials maintained that Jain had left of his own volition. But people familiar with the development said he was asked to leave. Jain was unavailable for comment and did not respond to phone calls and text messages.
Ramnik Narsey, who joined Walmart International last month as a senior vice-president, will function as the interim CEO. He was earlier the CEO and chairman of Woolsworth India.
Jain’s departure from Walmart comes at a time when the company is mired in controversies.
For instance, there is an allegation that Walmart invested $100 million in the front-end retail business of Bharti Enterpise in 2010, way before the Indian government permitted foreign direct investment (FDI) in multi-brand retail.
Government investigations are on.
Then, Walmart, the world’s largest retailer, was accused of indulging in illegal lobbying to influence government policy on FDI in multi-brand retail and to secure a licence for the same. Bribery allegations surfaced in Mexico as well.
In response, Walmart instituted an in-house investigation against bribery and corruption allegations in several countries, including India. Last November, it suspended its CFO and the legal team. Its probe is believed to be still on.
Walmart also effected certain changes in its financial reporting structure, clipping Jain’s powers in the process. From February this year, heads of finance, compliance, legal and ‘foreign corrupt practices’ divisions in India, who used to report to Jain, were asked to report directly to their global heads in the US instead.
Walmart, which has a joint venture – Bharti Walmart – with Bharti Enterprises in India, has been struggling to make headway in retail even nine months after the government allowed FDI in the sector. It also scaled down its cash-and-carry operations in India and not opened a single store after October 2012.
A retail consultant, requesting anonymity, said, “It is not just the cash-and-carry venture, even the retail operations under Easyday haven’t been doing very well, if you compare them with other retailers. This could be one of the reasons for Jain’s departure.”
Even though Walmart has not made any headway in setting up its own retail chains in India, the company said, “We remain optimistic about our business in India and look forward to our future in India under Ramnik’s leadership.”
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