Walmart Investigates Bribery Allegation Against Walmart de Mexico

Walmart Investigates Bribery Allegation Against Walmart de Mexico

Walmart Investigates Bribery Allegation Against Walmart de Mexico

Wal-Mart Stores, Inc. (NYSE:WMT) has said that it has an on-going investigation regarding the allegations that its subsidiary, Wal-mart de Mexico S A B de C V (PINK:WMMVY) used bribery in order to change the zoning map and get a construction permit near the pyramids of Teotihuacan.

According to the world’s largest retail giant, the company started investigating the allegations last year. Wal-Mart Stores, Inc. (NYSE:WMT) said, “The allegations contained in the New York Times article surrounding events in 2003-2004 involving the permitting and licensing process for a Wal-mart de Mexico store in Teotihuacan, Mexico, have been part of the company’s ongoing investigation of potential violations of the U.S. Foreign Corrupt Practices Act.”

Value Partners Asia Bets On India In Hopes Of “Demographic Dividend”

Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More

In addition, the company stated that “We are committed to having a strong and effective global anti-corruption program everywhere we operate and taking appropriate action for any instance of non-compliance. We recognize that our effort to date is a work in progress, and there is more to be done as we continue building a world-class FCPA compliance program.”

Mike Duke, CEO of Wal-Mart Stores, Inc. (NYSE:WMT) also stated that the company is taking the issue very seriously while emphasizing that the company does not accept ethical violations.

According to the report by the New York Times, a Mexican official received $52,000 from Wal-Mart de Mexico and agreed to change the zoning map of the area.

The New York Times also reported that 19 Wal-Mart Stores were part of the Wal-Mex bribery. The retail giant’s Mexican subsidiary paid $341,000 in bribes to be able to construct Sam’s Club stores in Mexico City without a construction & environmental permit as well as urban-impact assessment.

Additionally, last April the management of Wal-Mart Stores, Inc. (NYSE:WMT) sent investigators in Mexico City to find out if Wal-Mart de Mexico obtained its construction permit trough ways bribery. The investigators found evidences of suspected payments worth $24 million, indicating bribes were paid. The executives of Wal-Mart’s Mexican subsidiary knew about it and tried to conceal the violations from the main office in the United States. The lead investigators concluded, “There is a reasonable suspicion to believe that Mexico and USA laws have been violated,” and suggested investigating the issue further.

Wal-Mart Stores, Inc. (NYSE:WMT) did not continue its investigation, nor did they inform the authorities in Mexico and the United States regarding the violation, instead the retail giant promoted Eduardo Castro-Wright, the executive responsible in the alleged bribery to vice chairman of Wal-Mart in 2008, according to the report from the New York Times.

The retail giant was compelled to conduct an internal investigation after the New York Times published a detailed reported regarding the alleged bribery.

According to Wal-Mart, the audit committee composed of independent directors is currently overseeing the investigation. It is also cooperating with the Department of Justice and Securities and Exchange Commission (SEC) regarding the matter.

Updated on

No posts to display