June 22, 2019:
American retail giant Walmart has agreed to pay $282 million in the US to settle a federal bribery investigation for its businesses across several markets, including Brazil, China, Mexico & India, in a case that dates back nearly a decade.Walmart agreed to pay more than $144 million to settle the Securities & Exchange Commission’s (SEC’s) charges & approximately $138 million to resolve parallel criminal charges by the US Department of Justice (DoJ). The criminal penalty to the DoJ was agreed upon by the global retail giant & its wholly owned Brazilian subsidiary WMT Brasilia to resolve the probe into FCPA violations.
In India, from 2009 to 2011, Walmart failed to implement sufficient anti-corruption related internal accounting controls, resulting in its operations being able to retain third-party intermediaries, which made improper payments to government officials for getting store operating permits & licences, DoJ said in a statement on Thursday.
“Despite the audit reports discussing control deficiencies & the anonymous email alleging improper payments to government officials, Walmart did not begin to implement & maintain a system of sufficient internal accounting controls related to anti-corruption to address corruption concerns in India until in or around April 2011,” the US market regulator said.
In a statement SEC chief Charles Cain said, “Walmart valued international growth & cost-cutting over compliance. The company could have avoided many of these problems, but instead Walmart repeatedly failed to take red flags seriously & delayed the implementation of appropriate internal accounting controls.”
Last year, Walmart acquired a 77% stake in India’s largest online retailer Flipkart for $16 billion in the largest inbound acquisition in the country. Given its past experience, Walmart appointed four of its executives to senior roles at Flipkart including the chief financial officer (CFO), ethics & compliance officer, controller & general counsel in September 2018.
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