Walmart is paying nearly $283 million to settle aseven-year federal bribery investigation involving its business in Brazil,China, India and Mexico.
From 2000 to 2011, Walmart subsidiaries in thosecountries operated without "sufficient anti-corruption" oversight atthe company, according to an order filed Thursday from the US Securities andExchange Commission. The world's largest retailer allowed its subsidiaries toemploy third-party intermediaries who made payments to foreign governmentofficials without making sure those payments were not used as bribes, the SECsaid.
When Walmart learned of corruption risks, the companydid not "sufficiently investigate the allegations" or mitigate them,the SEC said. The SEC charged Walmart under the Foreign Corrupt Practices Act,which prohibits companies from paying bribes to foreign officials.
"Walmart valued international growth andcost-cutting over compliance," said Charles Cain, Chief of the SECEnforcement Division's Foreign Corrupt Practices Act unit. "The companycould have avoided many of these problems, but instead Walmart repeatedlyfailed to take red flags seriously and delayed the implementation ofappropriate internal accounting controls."
Walmart (WMT) agreed to pay more than $144 million tosettle the SEC's charges and an additional $138 million to resolve criminalcharges brought by the Department of Justice. Walmart's Brazilian subsidiaryalso pleaded guilty in connection with the resolution.
As part of the settlement, the Department of Justicewon't prosecute Walmart if it follows its agreement for three years. Thecompany has also agreed to independent oversight for two years, and it willreport to the SEC on its Anti-Corruption Compliance Program for two years.
In 2017, Walmart said it set aside $283 million for apossible resolution of the investigation with US government agencies.
"We're pleased to resolve this matter,"Walmart CEO Doug McMillon said in a statement Thursday. "Walmart iscommitted to doing business the right way, and that means acting ethicallyeverywhere we operate."
Last year, Walmart sold 80% of its stake in its Braziloperations to private equity firm Advent International. It recorded a $4.8billion pre-tax loss on the sale.
At the end of January, Walmart had 2,442 stores in Mexico,443 in China and 22 in India, according to its latest annual filing.
(Published by CNN Business, JUNE 20, 2019)
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