New York Lawyers for Wal-Mart Stores Inc have identified Brazil, India, China and South Africa along with Mexico as areas having the biggest risk for corruption, according to a letter from two congressmen who are doing their own investigation into the allegations of bribery in its Mexico operations.
The letter, dated Monday, shed light on a May 21 briefing with outside lawyers from Wal-Mart, who said they had been retained to do a global anti-corruption compliance review of its operations in 2011.
The attorneys from the law firms Greenberg Traurig and Kind Gump said the review focused on Brazil, China and Mexico because they represent the highest corruption risk. Based on the review, they recommended that Wal-Mart also evaluate its operations in India and South Africa.
In the letter to Wal-Mart CEO Mike Duke, Democratic congressmen Elijah Cummings of Maryland and Henry Waxman of California wrote that the world's largest retailer hasn't provided any documents regarding the potential violations of the Foreign Corrupt Practices Act, which forbids US companies from bribing foreign officials.
The two lawmakers also said Wal-Mart hasn't allowed them to interview any of its employees. "Wal-Mart's actions to date significantly inhibit our ability to investigate these allegations," stated the letter. A copy of the letter was sent to The Associated Press.
The congressmen ask that information be furnished by June 26. They also want details of the lawyers' recommendations.
"We are cooperating with the ongoing federal investigations, and as appropriate, will also continue to assist members of Congress and their staffs in understanding our efforts to address FCPA issues," said Dave Tovar in a statement e-mailed to The Associated Press. "We have already provided committee staff with one briefing and have another briefing scheduled tomorrow."
The New York Times reported in late April that Wal-Mart's Mexican unit allegedly paid millions of dollars in bribes to speed building permits and gain other favours. The Times said executives didn't notify authorities even after Wal-Mart found evidence of the scheme.
Wal-Mart is facing at least a dozen "derivative" lawsuits, meant to change the way a company is run. The plaintiffs are also seeking to recover any fines or other financial damages that Wal-Mart faces as a result of the violations and have the money be awarded to the company.
Wal-Mart has maintained that it's committed to a full and independent investigation, but that's in the early stages of the probe.
Meanwhile, Wal-Mart’s efforts to acquire Latin American assets from Carrefour SA are slowing as the French retailer focuses on turning around its European business, said people familiar with the matter.
Wal-Mart has pressed Carrefour to sell stores in Colombia and also Brazil, said the people, who declined to be identified as the negotiations were private. Carrefour’s Colombian unit generated 1.69 billion euros (Dh7.77 billion) in sales last year.
Wal-Mart is targeting stores overseas as revenue abroad climbs at 10 times the pace of US sales. Doug McMillon, head of Wal-Mart’s international business, said last month the retailer is open to purchases in Japan and Latin America, and signaled that Colombia could be a possible site of expansion.
“Wal-Mart is realizing that the best strategy is buying something” rather than building something new, Bryan Gildenberg, an analyst with Kantar Retail, said in a telephone interview yesterday. “Colombia is a growing market and Wal-Mart isn’t there.”
Wal-Mart and Carrefour have held on-and-off negotiations for more than two years, with Wal-Mart initiating many of the talks, said one of the people. After some conversations this year, Carrefour has slowed the pace of talks as it deals with deteriorating conditions in Europe, according to this person.
While Wal-Mart remains interested in the operations, no deal is imminent, said two of these people. A spokesman for Bentonville, Arkansas-based Wal-Mart declined to comment, as did a spokeswoman for Boulogne-Billancourt, France-based Carrefour.
