KPMG to conduct due diligence for Flipkart's vendors across India

17 May 2019 2 min. read
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As part of its efforts to maintain a clean profile across its global operations, retail giant Walmart has hired global professional services firm KPMG to help vendors of Walmart’s Indian subsidiary Flipkart with due diligence practices. The efforts are aimed at ensuring compliance with US legal standards.

The US Foreign Corrupt Practices Act (FCPA) prohibits any firms listed in the country from engaging in illicit activities in any of their foreign markets. Walmart has been engaged in efforts to ensure compliance with this legislation for a number of years now, exemplified by a similar engagement that it conducted in India in 2011.

At the time, the global retail giant was looking to ensure due diligence was conducted to prevent further incidents like the graft scandal in Mexico from tarnishing its reputation. In India, the firm tried to ensure legitimacy in the operations of Best Price – a Walmart-owned and operated chain of wholesale stores across India.

In order to conduct due diligence, the firm engaged the services of Big Four accounting and advisory firm KPMG. Since then, Walmart has been cautious in its approach to the Indian market, engaging in little expansion activity for a number of years until last year, when it acquired ecommerce giant Flipkart for $16 billion.KPMG to conduct due diligence for Flipkart's vendors across India

Now, the firm wants to ensure that Flipkart’s operations remain above board, and is applying its FCPA compliance framework to the firm. The firm has stuck with KPMG’s services for this latest effort, engaging the firm to conduct due diligence of Flipkart’s expansive operations.

Flipkart is a product of the rapidly expanding ecommerce market in India, driven by the steady increase in online activity. The marketplace relies on a vast pool of suppliers and vendors, all of whom are now being examined for compliance purposes.

The Economic Times reports that part of the new policy is to obtain detailed information through forms from all of Flipkart’s vendors, in addition to conducting audits on the suppliers’ operations. Part of Flipkart’s new information form reads, ““Independent reviews and assessments shall be performed at least annually to ensure that the organisation addresses non-conformities of established policies, standards, procedures and compliance obligations,”

“We always closely work with all our partners to ensure that we are sourcing the products responsibly and serve our customers together better. This also helps our seller partners grow their business in a more structured fashion,” said Flipkart in a statement to the Economic Times.