Much ado about bribing

24 April 2012 By Raul Gallegos

Wal-Mart’s Mexican unit saw more than $7 bln of market value vanish on allegations that its former boss authorized $24 mln of bribes. This looks like an over-reaction. Not only do Mexican authorities have bigger fish to fry, Walmex has no need to grease palms to keep growing.

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Shares of Wal-Mart’s Mexican unit, known as Walmex, fell 12.5 percent on April 23 to $2.87 a share, wiping more than $7 billion off the business’s market value. The drop followed a New York Times exposé published over the weekend that detailed allegations of Walmex’s involvement in years of payoffs to Mexican officials that were designed to expedite large store openings across the country. Wal-Mart has said it is investigating the veracity and extent of the violations.

The Mexican government said late on April 23 that it saw no reason to investigate, according to the Wall Street Journal. The office of President Felipe Calderon said in a statement that if the accusations are true, then the issue is a local matter as bribes for construction and other permits would have been paid to municipal or state officials, the newspaper reported.

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