Walmart pays fine in US for corrupt practices in India
Retail giant has allowed subsidiaries in Brazil, China, India and Mexico to employ third-party intermediaries who made payments to govt officials
Washington: Global retail giant Walmart has agreed to pay $282.7 million to settle charges of violating anti-corruption regulations of the US while operating its business in India, China, Brazil and Mexico, the Security and Exchange Commission (SEC) has announced.
According to the SEC, these violations were conducted by Walmart's third-party intermediaries who made payments to foreign government officials without reasonable assurances that they complied with the Foreign Corrupt Practices Act (FCPA).
The SEC said on Thursday that it has charged Walmart with violating the FCPA by failing to operate a sufficient anti-corruption compliance programme for more than a decade as the retailer experienced rapid international growth. The SEC brought the charges against Walmart in 2011.
Walmart agreed to pay more than $144 million to settle the SEC's charges and approximately $138 million to resolve parallel criminal charges by the Department of Justice for a combined total of more than $282 million, the SEC said.
"Walmart valued international growth and cost-cutting over compliance," said Charles Cain, Chief of the SEC Enforcement Division's FCPA Unit.
"The company could have avoided many of these problems, but instead Walmart repeatedly failed to take red flags seriously and delayed the implementation of appropriate internal accounting controls," he said.
Walmart consented to the SEC's order finding that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934.
According to the SEC's order, Walmart failed to sufficiently investigate or mitigate certain anti-corruption risks and allowed subsidiaries in Brazil, China, India, and Mexico to employ third-party intermediaries who made payments to foreign government officials without reasonable assurances that they complied with the FCPA.
The SEC's order details several instances when Walmart planned to implement proper compliance and training only to put those plans on hold or otherwise allow deficient internal accounting controls to persist even in the face of red flags and corruption allegations.