A US federal probe into allegations of corruption against Walmart has revealed that the retailer paid bribes to officials in Mexico and India to clear regulatory hurdles and obtain permissions required to move goods through customs, build stores and get various other permits.
The three-year-old investigation found evidence of bribery in India, where small payments of between $5 (£3.2, €4.4) and $200 were paid to low-level Indian officials, which totalled up to millions of dollars. This evidence is likely to see the world's largest retailer face US foreign-bribery charges under the Foreign Corrupt Practices Act (FCPA), The Wall Street Journal reported.
FCPA bars American companies and individuals from paying bribes overseas to win business. It levies penalties on the basis of the amount of profit a company makes over an alleged misconduct.
Walmart broke off its joint-venture with India's Bharti Enterprises in 2013 and decided to become a wholesaler there. Given its operations in the country have not been profitable, the retailer may not have to pay a sizeable penalty in the India bribery case.
Investigators also found that Walmart had paid similar bribes in Mexico although the bulk of such activities seemed to be in India. In April 2012, The New York Times alleged that Walmart had paid millions of dollars in bribes to middlemen in Mexico, which is home to about 20% of Walmart's roughly 11,500 locations. The Justice Department launched its investigation, which is still ongoing, following the news. Besides, Walmart lost about $10bn in market value as its shares fell by about 5% as reaction to this news.
However, considering the Justice Department investigation has not found Walmart guilty of any major offence, it could result in a much smaller case than expected. It could be resolved with a fine with no criminal charges being brought against any Walmart executive.
The largest such case to date is that of Siemens which pleaded guilty to paying bribes of over $800m to win contracts around the world. More recently, French power company Alstom too claimed that it had shelled out tens of millions of dollars in bribes across Indonesia, Saudi Arabia and other locations to win power and transportation contracts.