Wal-Mart Stores Inc. engaged in suspected bribery worth millions of dollars in India, the Wall Street Journal reported Monday, citing a federal investigation into allegations of corruption in the company. Investigators discovered the suspected bribery while investigating alleged corruption at the American retail giant's operations in Mexico.
The report stated that Wal-Mart paid thousands of small payments to low-ranking Indian officials to help move goods through customs or acquire real-estate permits. In 2013, Wal-Mart dropped plans to open stores in the South Asian country in a joint venture with Bharti Enterprises Ltd. The retail chain instead chose to become a wholesaler in India, the Journal reported.
"The vast majority of the suspicious payments were less than $200, and some were as low as $5, the people said, but when added together they totaled millions of dollars," the newspaper stated.
However, it was highly unlikely that Wal-Mart would face penalty for bribery in India because its operation in the country was not a source of profit under the U.S. Foreign Corrupt Practices Act (FCPA), sources told the Journal. Penalties under the FCPA are mostly connected to profit generated through misconduct.
The probe also revealed that the retail giant’s Mexico operations were involved in few major offenses, potentially resulting in a much smaller case than investigators expected, according to the Journal. The investigators, who have been working on the case for three years, have nearly completed the probe and the case could potentially be resolved with a fine and no criminal charges against individual Wal-Mart executives, sourced told the Journal.
Wal-Mart spokesman Greg Hitt said the company was cooperating with the officials on the case. A Justice Department spokeswoman did not comment on the status of the investigation.
Authorities launched an investigation against Wal-Mart after the New York Times reported in 2012 that Wal-Mart de Mexico (Walmex) was engaged in a bribery campaign for several years in Mexico to build its business.