Mexico opens Wal-Mart bribery probe
Retail giant's shares continue to drop over allegations
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box313/FlickrA Wal-Mart sign can be seen in Mexico City. Authorities in Mexico have opened an investigation into whether government officials were involved in alleged bribery by Wal-Mart de Mexico.
Federal authorities in Mexico announced Wednesday they would investigate to determine if government officials at the national level were involved in alleged bribery by the U.S. retail giant Wal-Mart, according to The Associated Press.
According to media reports Tuesday, the Justice Department in December opened a probe of Wal-Mart after the company disclosed to market regulators that it was conducting an internal review of operations in Mexico.
Shares in the company have continued to slide for a third straight day, closing Wednesday at $57.36, representing a drop of more than 8 percent from the April 20 intraday high of $62.45 and more than wiping out this year’s gains.
The drop was precipitated by a blockbuster New York Times article on Saturday which reported that the company had squelched an internal probe that concluded that its Mexican subsidiary had paid $24 million in bribes to Mexican officials.
According to the AP, Mexico’s Public Administration Department had previously suggested that the bribery allegations only concerned state officials. But the news service now reports that the anticorruption agency says it will examine if federal officials might have been involved.
The Financial Times reported Tuesday that Eduardo Castro Right, who headed Wal-Mart de Mexico from 2002 to 2005, had resigned from the board of MetLife to devote himself to defending his reputation.
The New York Times had reported that one former executive had identified Castro Wright, who was promoted to vice-chairman of Wal-Mart in 2008, as “the driving force behind years of bribery.”
This article originally appeared on GlobalPost.
