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.
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