Walmart Warns of More Bribery Probe-Related Costs, Consequences
Posted on March 27, 2013 by
BENTONVILLE, Ark.-Walmart has said the ongoing investigation into alleged bribery of Mexican government officials by its Walmart de Mexico (Walmex) subsidiary and other foreign subsidiaries could result in losses and other consequences to its business.
In its 10-K filing for the fiscal year ending on Jan. 31 with the U.S. Securities and Exchange Commission, the retailer said the costs incurred from its internal investigation into these bribery accusations, plus complying with government regulatory bodies in their investigations, totaled $157 million in the just-completed fiscal year. The company said it expects to incur additional costs as these investigations proceed.
Walmart also said the investigations could result in other enforcement actions, such as "judgments, settlements, fines, penalties, injunctions, cease-and-desist orders, debarment or other relief, criminal convictions and/or penalties." In addition, the "existing and additional shareholder lawsuits may result in judgments against us and our current and former directors and officers named in those proceedings," the filing said.
Last April, a story in the New York Times reported allegations that Walmex officials paid bribes to obtain building permits throughout Mexico for the construction of Walmart stores. The U.S. Foreign Corrupt Practices Act prohibits businesses from paying bribes to foreign officials.
Along with the retailer's internal investigation, Walmart has said it has been cooperating with the SEC and the U.S. Department of Justice in its investigations. In a separate SEC filing last November, the company said it has widened its internal probe to include allegations of other violations of the Foreign Corrupt Practices Act in other parts of the world, including Brazil, China and India.