Walmart is paying nearly $283 million to settle a seven-year federal bribery investigation involving its business in Brazil, China, India and Mexico.
From 2000 to 2011, Walmart subsidiaries in those countries operated without “sufficient anti-corruption” oversight at the company, according to an order filed Thursday from the US Securities and Exchange Commission. The world’s largest retailer allowed its subsidiaries to employ third-party intermediaries who made payments to foreign government officials without making sure those payments were not used as bribes, the SEC said.
When Walmart learned of corruption risks, the company did not “sufficiently investigate the allegations” or mitigate them, the SEC said. The SEC charged Walmart under the Foreign Corrupt Practices Act, which prohibits companies from paying bribes to foreign officials.
“Walmart valued international growth and cost-cutting over compliance,” said Charles Cain, Chief of the SEC Enforcement Division’s Foreign Corrupt Practices Act unit. “The company could have avoided many of these problems, but instead Walmart repeatedly failed to take red flags seriously and delayed the implementation of appropriate internal accounting controls.”
Walmart (WMT) agreed to pay more than $144 million to settle the SEC’s charges and an additional $138 million to resolve criminal charges brought by the Department of Justice. Walmart (WMT)’s Brazilian subsidiary also pleaded guilty in connection with the resolution.
As part of the settlement, the Department of Justice won’t prosecute Walmart if it follows its agreement for three years. The company has also agreed to independent oversight for two years, and it will report to the SEC on its Anti-Corruption Compliance Program for two years.
In 2017, Walmart said it set aside $283 million for a possible resolution of the investigation with US government agencies.
“We’re pleased to resolve this matter,” Walmart CEO Doug McMillon said in a statement Thursday. “Walmart is committed to doing business the right way, and that means acting ethically everywhere we operate.”
Last year, Walmart sold 80% of its stake in its Brazil operations to private equity firm Advent International. It recorded a $4.8 billion pre-tax loss on the sale.
At the end of January, Walmart had 2,442 stores in Mexico, 443 in China and 22 in India, according to its latest annual filing.