- Bribes of mostly below $200 paid to junior officials: report
- Authorities find little evidence of major misconduct in Mexico
A three-year long investigation by the U.S. government found evidence Wal-Mart Stores Inc. paid bribes to local officials in India, the Wall Street Journal reported. The same probe found less-than-expected signs of corruption in Wal-Mart’s Mexico business, it said.
The bribing in India comprised thousands of small payments to low-level officials to help move goods through customs or obtain real estate permits, the newspaper reported, citing persons it didn’t identify. The vast majority of the payments were below $200, and some were as low as $5, with the total amounting to millions of dollars, the report said.
Wal-Mart is likely to face charges of violating the U.S. Foreign Corrupt Practices Act due to these payments, the paper said. The Bentonville, Arkansas-based retailer is “cooperating fully” with the U.S. government on the matter and can’t comment further, Wal-Mart India spokesman Rajneesh Kumar said when contacted Monday.
Wal-Mart, which last week suffered its worst stock decline in more than 27 years after predicting a drop in annual profit, has seen its Indian operations plagued by botched ventures and sluggish growth. The world’s largest retailer in 2007 entered a supermarket joint venture with Bharti Enterprises only to see it split up in 2013, and Wal-Mart India has since then focused only on its wholesale business.
The charges in India are unlikely to amount to a large fine as FCPA penalties are connected to profits the alleged misconduct generated, the Journal said. Wal-Mart’s Indian unit has not turned a profit since inception eight years ago, and posted a loss of 2.3 billion rupees ($35 million) on sales of about 30 billion rupees in the year ended December 2014, according to the Economic Times of India, citing registrar filings.
Wal-Mart has been the subject of several Indian government probes in recent years, including an investigation into allegations it lobbied officials which ended 2013 without any conclusions.