Wal-Mart Expects to Incur More Costs in Bribery Probes
Wal-Mart Stores Inc. (WMT), the world’s largest retailer, said it expects to continue incurring costs related to its investigations of possible bribery in its international operations.
The cost related to the probes was $157 million in the year ended Jan. 31, the Bentonville, Arkansas-based company said yesterday in a filing with the U.S. Securities and Exchange Commission.
Wal-Mart last year began investigating allegations that executives in Mexico paid more than $24 million in bribes to speed the retailer’s expansion there and has since said it also is probing operations in Brazil, India and China. The retailer said yesterday that it is spending money on its internal probes, responding to information requests from government investigators and defending shareholder lawsuits.
The shares were little changed at $74.77 at the close in New York. Wal-Mart has added 9.6 percent this year, compared with an 11 percent gain for the Dow Jones Industrial Average.
While Wal-Mart doesn’t expect the matters to have a material adverse effect on its business, the company said it can’t reasonably estimate the potential loss from the situation.
The U.S. Department of Justice and the SEC as well as federal and local government agencies in Mexico are investigating the allegations that Wal-Mart systematically bribed Mexican officials. The allegations were first outlined in a New York Times article in April 2012. Democratic Representatives Henry Waxman of California and Elijah Cummings of Maryland also are probing the retailer.
Wal-Mart in December named Karen Roberts general counsel as her predecessor, Jeff Gearhart, focuses on global compliance efforts. That followed the company combining its compliance office with ethics, investigations and legal functions to form one organization in October.
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