Wal-Mart Stores Inc said on Thursday that it was probing corruption allegations against it in Brazil, China and India, in addition to the ongoing US and Mexican government investigations over its activities in Mexico.
In a statement to the Securities and Exchange Commission (SEC) and in a public release, it said the investigations were related to possible violations of the US Foreign Corrupt Practices Act (FCPA).
Since the launch of an internal review of FCPA compliance last year, the giant global retailer said it has “identified or been made aware of additional allegations regarding potential violations of the FCPA.”
“We have inquiries or investigations regarding allegations of potential FCPA violations in a number of foreign markets where we operate regarding FCPA allegations, including but not limited to Brazil, China and India,” it said. “This is in addition to the ongoing investigation in Mexico.”
The New York Times reported in April that the retail giant’s largest non-US subsidiary, Walmart de Mexico, shelled out US$24 million in bribes to Mexican officials to win market dominance in the early 2000s.
In its SEC statement on Thursday, Wal-Mart said the costs of dealing with the investigations, its own and external, ran to US$99 million in the nine months to Oct. 31.
Speaking to shareholders in June, Wal-Mart Stores chairman Robson Walton vowed the retailer would not tolerate corrupt acts, promising “a thorough and comprehensive inquiry” into the Mexico accusations.
Since then allegations of wrongdoing elsewhere have cropped up.
Last month Wal-Mart Stores denied accusations it broke rules banning foreign investment in Indian supermarkets as it tries to build a presence in the world’s second-most populous country.
Any investments were “in complete compliance with India’s foreign direct investment laws” and all “processes have been duly followed and details filed with relevant Indian government authorities,” a Wal-Mart Stores spokeswoman said.
Indian authorities are investigating allegations that Wal-Mart Stores violated foreign exchange rules when it invested US$100 million into a domestic unit owned by its wholesale joint-venture partner, a senior law enforcement official said yesterday.
The decision to probe Wal-Mart Stores comes after an Indian lawmaker wrote to the Indian prime minister earlier this year, raising allegations of potential violations of investment rules, and the complaint was subsequently passed from one government department to another.
“Yes, the Enforcement Directorate has initiated an investigation into the allegations against Wal-Mart,” said the official, who declined to be named.
“The probe is at an early stage and therefore [it is] difficult to say what the outcome will be,” the official said.
The lawmaker accused Wal-Mart Stores of “clandestinely and illegally” investing US$100 million in the multi-brand retail business of its wholesale joint venture partner, Bharti Enterprises, as early as 2010, before India allowed foreign companies to operate front-end stores.