In a case that continues to reverberate across borders, Wal-Mart Stores, the world’s largest retailer, announced recently it has started its own probe into allegations that executives at its Mexican operations made hundreds of illegal payments — worth more than $24 million — to help expedite the opening of new stores.
According to reports, Wal-Mart officials in the U.S. learned of the bribery allegations in 2005, but failed to alert U.S. or Mexican officials.
The charges have cast a cloud over Wal-Mart, which is also the largest retailer in Mexico and the country’s top private-sector employer.
Wal-Mart’s own probe of possible bribery could force the firing of some of the firm’s executives, and bring serious fines from the U.S. government if investigations reveal that the company’s senior managers knew about the illicit payments but did not take sufficient action.
The day after the allegations were made public, Wal-Mart shares fell nearly 5%.
That may be only the beginning of Wal-Mart’s troubles: In other repercussions, leaders of New York City’s pension funds said they would vote their shares against the five Wal-Mart directors standing for re-election at the company’s shareholder meeting in June.
Also, the California State Teachers’ Retirement System, which holds more than 5.3 million Wal-Mart shares, has filed a lawsuit alleging that the firm’s senior officials engaged in massive opportunistic sales of the company’s stock before news of the Mexico allegations broke in late April.
According to legal and ethics experts at Wharton and elsewhere, the Wal-Mart case raises broader questions about how multinational companies conduct business in foreign countries.
Is Wal-Mart’s alleged bribery in Mexico an anomaly, or is it more typical of multinational behavior than many corporate executives would like to admit?
Is the practice of bribing public officials ever justifiable from an economic or ethical point of view?And apart from collapsing share prices and shareholder lawsuits, what are some of the other possible consequences of bribing foreign officials?
delawareonline.com
According to reports, Wal-Mart officials in the U.S. learned of the bribery allegations in 2005, but failed to alert U.S. or Mexican officials.
The charges have cast a cloud over Wal-Mart, which is also the largest retailer in Mexico and the country’s top private-sector employer.
Wal-Mart’s own probe of possible bribery could force the firing of some of the firm’s executives, and bring serious fines from the U.S. government if investigations reveal that the company’s senior managers knew about the illicit payments but did not take sufficient action.
The day after the allegations were made public, Wal-Mart shares fell nearly 5%.
That may be only the beginning of Wal-Mart’s troubles: In other repercussions, leaders of New York City’s pension funds said they would vote their shares against the five Wal-Mart directors standing for re-election at the company’s shareholder meeting in June.
Also, the California State Teachers’ Retirement System, which holds more than 5.3 million Wal-Mart shares, has filed a lawsuit alleging that the firm’s senior officials engaged in massive opportunistic sales of the company’s stock before news of the Mexico allegations broke in late April.
According to legal and ethics experts at Wharton and elsewhere, the Wal-Mart case raises broader questions about how multinational companies conduct business in foreign countries.
Is Wal-Mart’s alleged bribery in Mexico an anomaly, or is it more typical of multinational behavior than many corporate executives would like to admit?
Is the practice of bribing public officials ever justifiable from an economic or ethical point of view?And apart from collapsing share prices and shareholder lawsuits, what are some of the other possible consequences of bribing foreign officials?
delawareonline.com
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