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April 27, 2012

MEXICO: Mexican authorities launch Walmex probes

Mexico's attorney general has launched an investigation into allegations Wal-Mart Stores' local unit bribed officials to make it easier to open stores in the country.

By Dean Best

Mexico’s attorney general has launched an investigation into allegations Wal-Mart Stores’ local unit bribed officials to make it easier to open stores in the country.

The probe will look into whether a criminal investigation into the allegations is necessary.

The announcement yesterday (26 April) came a day after Mexico’s federal comptroller said it had started to check the permits Wal-Mart de Mexico y Centroamerica, also known as Walmex, secured to open outlets in the country.

Wal-Mart is already reportedly facing an investigation from the US Department of Justice into the allegations.

Last weekend, The New York Times reported a former Walmex executive told a senior Wal-Mart lawyer in 2005 that the retailer’s local unit had bribed officials to obtain permits to open stores.

The newspaper said Wal-Mart sent investigators to Mexico City and discovered evidence of bribery. However, after being presented with the evidence, the world’s largest retailer decided to end the investigation, the newspaper said.

The claims implicate Wal-Mart vice chairman Eduardo Castro-Wright as being at the centre of the bribery. The New York Times said the former Walmex executive had described Castro-Wright as the driving force behind the payments.

In the wake of the report, Wal-Mart has said it has “taken a number of specific, concrete actions to investigate this matter” and had “strengthened processes” around complying with the US Foreign Corrupt Practices Act around the world, at its HQ in Bentonville and in Mexico.

The retailer said it has set up the positions of global FCPA compliance officer and a dedicated FCPA compliance director in Mexico.

“We are confident we are conducting a comprehensive investigation and if violations of our policies occurred, we will take appropriate action,” a Wal-Mart spokesperson said on Tuesday.

Yesterday, Walmex said it would “unequivocally co-operate” with the Mexican authorities and would “guarantee” that all requests for records “were properly satisifed”.

The retailer, in which Wal-Mart has a majority stake and which runs over 2,700 stores in Mexico, was investigating the allegations “thoroughly”.

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