Walmart to incur losses due to foreign corruption cases
28 March 2013
Multinational retail giant Walmart yesteerday said the company expected to incur financial losses considering the ongoing investigation into alleged corruption cases pertaining to its foreign subsidiaries.
''...We expect to continue to incur costs (in addition to the $157 million of costs incurred in fiscal 2013) in conducting our on-going review and investigations'', Walmart said in a filing with US Securities and Exchange Commission.
According to the company, its audit committee comprising its independent directors (on board) was conducting an internal investigation into, among other things, alleged violations of the Foreign Corrupt Practices Act (FCPA) and other alleged crimes or misconduct in connection with certain of our foreign subsidiaries, including Wal-Mart de Mco, SAB de CV, or Walmex.
Regarding the scale of the loss, the company said, it believed that it was probable that it would incur a loss from these matters. It added, the amount of loss or range of loss that might arise from these matters could not be reasonably estimated.
''Although we do not presently believe that these matters will have a material adverse effect on our business, given the inherent uncertainties in such situations, we can provide no assurance that these matters will not be material to our business in the future'', it stated.
Walmart last year started investigations into allegations that executives in Mexico paid more than $24 million in bribes for expediting the retailer's expansion there and had since said it was also probing operations in Brazil, India and China.
The retailer yesterday said, it was spending money on its internal probes, responding to information requests from government investigators and defending shareholder lawsuits.
The company's shares were down 0.2 per cent to $74.61 in morning trade, New York. The retailer had added 9.6 per cent this year through yesterday, as against an 11 per cent gain for the Dow Jones Industrial Average.