Walmart's International Bribery Probe Widens to China, Brazil and India
Can a company become, and stay, the world's top retailer without cutting a few legal corners?
Walmart (WMT) announced Thursday that an internal investigation into bribery accusations, originating in Mexico, has broadened to include operations in Brazil, China and India. The disclosure came in a Securities and Exchange Commission filing tied to third-quarter financial results.
The widening inquiry was more bad news for the Arkansas-based multinational: Revenue and fourth quarter profit outlook came in lower than analysts had expected.
Sponsored Links
Walmart had already confirmed that its board's audit committee was investigating possible violations of the Foreign Corrupt Practices Act by its Mexican subsidiary. And the wording of this latest revelation suggests that the number of countries involved may still increase: "Inquiries or investigations regarding allegations of potential FCPA violations have been commenced in a number of foreign markets where we operate, including but not limited to Brazil, China, and India."
Citing "a person with direct knowledge of the company's internal investigation," the New York Times reports that Walmart has not yet concluded that it had in fact paid bribes in China, India and Brazil:
"But it did indicate that the company had found enough evidence to justify concern about its business practices in the three countries -- concerns that go beyond initial inquiries and that are serious enough that shareholders needed to be told."
The Times previously reported that, seven years ago, Walmart found "credible evidence that its Mexican subsidiary had paid brides in its effort to build more stores" -- obtaining permits via corruption throughout the country, the illegal payments totaling as much as $24 million. Making matters worse, top executives squashed an internal investigation, fearful of deleterious repercussions in an essential market. There were no consequences for any Walmart de Mexico executives; chief executive Eduardo Castro-Wright was actually elevated to vice chairman of Walmart in 2008.
Get info on stocks mentioned in this article:
