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. (File Photo)
International retail giant Walmart Thursday agreed to pay over USD 282 to various US bodies to settle charges of violating anti-corruption regulations while conducting its business in India, China, Brazil and Mexico. According to the US Security and Exchange Commission (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 or FCPA. SEC has charged Walmart with violating FCPA by failing to operate a sufficient anti-corruption compliance programme for more than a decade as the retailer experienced rapid international growth.
Walmart agreed to pay more than USD 144 million to settle the SEC’s charges and approximately USD 138 million to resolve parallel criminal charges by the Department of Justice for a combined total of more than USD 282 million, 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.