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Fisher Capital Management Tips: Walmart Execs under Probe for Bribery Scandal

By Fisher Corp Subscribe to RSS | May 22nd 2012 | Views:
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http://fishercapitalmanagement-corporatenews.com/2012/05/10/fisher-capital-management-tips-walmart-execs-under-probe-for-bribery-scandal/

Retailer giant Wal-Mart is under scrutiny for allegedly covering a bribery scandal in its Mexico unit 6 years ago. The Mexican executive who disclosed the scandal said that WalMart de Mexico had bribed people to get permits all over the country in its rush to secure the firm’s market presence.

WalMart’s growth in Mexico has been phenomenal that one out of every five of their branches is actually in that country, which makes it also the nation’s biggest private employer with 209,000 staff.

The Fisher Capital Management Tips report details how the firm paid bribes in order to get building permits domestically and how it had sent an investigating team. The group allegedly discovered a paper trail of suspicious payments amounting to over USD 24 million. However, WalMart’s executives had stopped the probe and failed to notify either the US or Mexican government authorities. Moreover, the report claims that the previous Walmex head Eduardo Castro-Wright was the one responsible for the bribing scheme and that the ex-CEO Lee Scott as well as the present CEO Mike Duke also know about it.

However, he continued to insist that they have notified the US government of the breach saying they have “met voluntarily with the U.S. Department of Justice and the Securities and Exchange Commission to self-disclose the ongoing investigation”.

The Arkansas-based retailer said that it complied with the law by disclosing the probe to the Securities and Exchange Commission and the US Department of Justice. Besides, according to them, the alleged activities reported by Fisher Capital Management Tips happened over 6 years ago.

WalMart’s spokesman said, “If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.”

But the whistleblower countered their statement by saying that the company only disclosed the whole thing to the government after the issue leaked to the public.

WalMart supposedly has already taken steps to increase internal controls, expanded training and made stricter systems in compliance with the FCPA and announced that Walmex’s General Counsel Jose Luis Rodriguezmercado was already removed from his post. The ongoing probe is being handled by third-party accountants and lawyers who specialize in Foreign Corrupt Practices Act.

This case will certainly be a significant blow to the company relying in developed nations for its continuous expansion where its growth has sharply increased recently. WalMart is the largest retailer, public corporation and private employer worldwide, operating as Seiyu in Japan, Asda in United Kingdom and Best Price in India, China and Latin America.

Other markets are also tapped by the report that claims the headquarters received corruption reports from Asia in at least 5 times every month.

If proven guilty, WalMart could face a heavy fine as punishment for bribery cases.

Fisher Corp - About Author:
At Fisher, we are committed to a long-term investment philosophy that emphasizes quality and diversification. We do business this way because years of experience have convinced us that it's one of the best ways to help you achieve your goals. Our research department uses this philosophy as a guideline when recommending individual stocks.

To learn more about the way we research the companies we recommend to our investors, take a look:

Many investors want to buy a stock if it's a hot IPO, if it's been featured in the news lately or if its price has shot up rapidly in the past few months. Because Fisher does business differently, we view these as warning signs, not buying signs.

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