Allegations Against Walmart Operations In Mexico
The investigations have been going on for the past three years against Walmart's executive but there are signs that it might come to an end with no criminal charges and a simple fine.
Walmart is dealing with a case since the past three years with allegations of corruption in its operations in Mexico. There are no major offenses, so the conclusion might turn out to be disappointing for the ones who made these claims and filed the case, according to WSJ and Reuters.
Even though the investigations are still going on, major work is finally complete, there are hints that it might lead to the conclusions of no criminal charges of any kind but just a fine on any executive.
Walmart wholesales spokesman, Greg Hitt, refused to make any comments regarding the investigations and its specifics. The company, on the other hand, said it is cooperating with the government as much as it can. Investigators did not find corruptions in Mexico but ironically bribery in India instead. Bribes are given to the local official in the country, according to the people.
Hence, the company will eventually have to face other charges. This will be bad for the retail chain because the recent event has not been in favor of it at all, especially the fact that its stock fell down by 12% in the market. One spokesman from Justice Department commented regarding the case that they still have an active FCPA investigation going on and refused to say further.
The department initiated the investigations after New York Time published articles regarding bribes that the multinational retailer might have paid in Mexico to attain permits for constructing its stores in 2012. The articles also stated how much money the retail chain might have paid to the local official in Mexico in good detail, by describing how difficult it really is to attain permits.
This awarded the articles with the Pulitzer Prize for investigative journalism. After these articles, the company’s shares declined by 5%, eradicating $10 billion of market value. 20% of Walmart stores are in Mexico. Bribes made in India would not result in any penalties because its business has not gotten much profit there. The bribes in India are heavy for local officials to move goods through customs without any hassle and also achieve property permits.
The payment ranges from $200 to as less as $5, but did make up millions all combine. There is similarity in both the payments. In Mexico, it was at a minor level compared to India.
The company wanted to become the exclusive wholesaler in the Asian country. Since there would not be any criminal charges, it can finally relax with the 2012 case now. Wal-Mart stock closed at $58.85 on the October 19 market close.
