Shares in Wal-Mart Stores Inc, the world's
largest retailer, were under pressure Thursday as Congress pressed on
with an investigation of alleged bribery in Mexico.
Shares declined 3 per cent after markets opened. Wal-Mart's second
quarter report fell short of analyst's expectations, adding to the
downward pressure. The company said its earnings were 4.02 billion
dollars, a 5.7-per-cent rise over the same period last year. Revenues
were up 4.5 per cent to 114.3 billion dollars.
According to members of Congress, an investigation into alleged
tax evasion and money laundering has expanded beyond Mexico to
Wal-Mart operations in five other countries. The challenge to
Wal-Mart to come forth with more information was contained in a
letter to Wal-Mart this week from Representatives Elijah Cummings and
Henry Waxman.
In April, a New York Times investigation showed that bribery
played a significant role in the rapid growth in Mexico of the
US-based superstore. Local Wal-Mart managers allegedly paid money to
skip over permit rules in its rush to expand in Mexico.
The article triggered a multi-faceted investigation in the US.
Under US law, it is a crime for American companies and their
subsidiaries to bribe foreign officials.
Wal-Mart's chief financial officer Charles Holley told reporters
Thursday that the company would pull back its expansion plans
overseas as a result of the investigations into the Mexico
allegations. He noted this would apply especially to its operations
in Brazil and China.
