NEW DELHI: Conceding that it bribed its way into the global markets, US retail giant Walmart has agreed to pay $282.7 million to the Department of Justice and the US Securities and Exchange Commission to settle a seven-year-long case, which accused it of bribing officials in India, China, Mexico and Brazil to secure business permits.
The bribery case related to India covered the 2009-2011 period, when Walmart was running a wholesale cash-and-carry joint venture with Bharti Enterprises. The wholesale venture ended in 2013. The world’s largest retailer currently operates 23 wholesale stores in India, which has allowed full foreign ownership of such outlets. Last year, Walmart also bought a 77 per cent stake in Flipkart for about $16 billion.
The retail giant is accused of looking the other way when its India venture used third-party intermediaries to make improper payments to government officials to obtain store operating permits.
“In a number of instances, insufficiencies in Walmart’s anti-corruption-related internal accounting controls in these foreign subsidiaries were reported to senior Walmart employees and executives,” the release said.
These payments were, then, falsely recorded in Walmart’s joint venture’s books and records with vague descriptions such as ‘misc fees’, ‘miscellaneous’, ‘professional fees’, ‘incidental’ and ‘government fee’, it added.
As part of the deal, Walmart has entered into a non-prosecution agreement with the DOJ.
Case diary
Investigations found lapses in Walmart’s internal controls, which were in violation of the US Foreign Corrupt Practices Act
Penalty includes $137.96 mn to be paid to the DOJ and $144.69 mn in disgorgement of profits plus interest to the SEC
In India, it had a JV with Bharti Enterprises for wholesale cash and carry stores. The business floundered and JV ended in 2013