Wal-Mart Inc. (NYSE:WMT) has announced that it is “probable” that it will incur losses as a result of a bribery probe in Mexico, according to a regulatory filing from Tuesday. Company representatives reportedly bribed Mexican officials in efforts to speed up expansion in the region, Reuters is reporting.
Details were not provided, and the filing stated that the company could not estimate the amount of losses that it would endure, because of the complexity of the related probes and internal review, but it did emphasize that it would not have a material effect on its business.
“This is clearly a bad action, if found guilty, but we believe these issues and penalties will not dramatically impair their balance sheet and its ongoing business model,” especially in the U.S., Janney Capital Markets analyst David Strasser said in a note to investors.
The New York Times ran a report last year on the bribery rumors, and noted that Wal-Mart had intentionally snubbed early probes into the matter that company representatives paid bribes years earlier to help expand business and construct stores in the region.
That incident cost Wal-Mart $157 million in the fiscal year that ended January 31 and the tally will rise, the retailer said. ”We expect to continue to incur costs … in conducting our on-going review and investigations,” the statement read. As of three months earlier, the costs had come to $99 million.
The company, along with other regulatory bodies, are also looking into bribery claims in Brazil, China, and India.
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