by Christopher Freeburn | August 16, 2012 12:17 pm
Wal-Mart‘s (NYSE:WMT) Mexican subsidiary may be facing a new scandal.
Just months after The New York Times reported on allegation of millions of dollars in bribes paid to Mexican government officials, two U.S. congressmen claim that the company also engaged in money-laundering and tax evaision, Reuters notes.
Representatives Elijah Cummings (D-Md.) and Henry Waxman (D-Calif.), senior members of the House of Representatives’ Oversight & Energy Committee, sent a letter to Wal-Mart this week saying records from its Mexico subsidiary showed evidence of financial improprieties.
Shares of Wal-Mart dropped more than 3% in Thursday midday trading (Wal-Mart also reported earnings today).
The company said it was unaware of the new investigation, but was cooperating with ongoing probes of its Mexico unit conducted separately by the Securities & Exchange Commission and the U.S. Department of Justice. However, the congressmen accused the company of failing to cooperate with their investigation.
The bribery allegations and any additional charges put Wal-Mart afoul of the Foreign Corrupt Practices Act (FCPA) and could result in fines. A large number of U.S. companies are currently under investigation by the federal government for possible FCPA violations.
Wal-Mart officials have promised to boost overseas compliance. The company recently hired a former partner at accounting giant PricewaterhouseCoopers to oversee compliance issues.
Source URL: http://investorplace.com/2012/08/wal-mart-faces-new-probe-of-mexico-subsidiary/
Short URL: http://invstplc.com/1fvzUMA
Copyright ©2017 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.