Ehics and Governance Report 2022

Running Head: EHICS AND GOVERNANCE
EHICS AND GOVERNANCE
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EHICS AND GOVERNANCE1
Walmart to pay 282 million dollars for resolving FCPA, DOJ and SEC
Charges
Walmart Inc. is the largest retail chain in the world. It is an American Company with
its headquarters in Bentonville, Arkansas. Sam Walton founded the company in the year
1962. The company was incorporated in the year 1969. Today Walmart more than 11000
stores operating in 27 countries across the globe. The products ranges from Electric
Equipment, Furniture, Apparels, Footwear, and Kitchen appliances to small parts and
components. Sometimes it is told that products, which are not available in Walmart, does not
exist at all. One of its specialty is that it also focuses on local homegrown products, which are
only found in those locations. Therefore, the global acceptance is also very high in this
respect. The expansion path of Walmart, from the point of view of the consumers has been
quite smooth. However, the problem is that throughout a decade, the company has used
unfair means to acquire the locations outside United States of America, which had recently
come into notice.
According to the Foreign Corruption Practices Act (FCPA), Walmart has been alleged
with violation of internal accounting of the books and records. Moreover, Walmart has
entered a non-prosecution agreement for a period of 3 years and has agreed to perform
imposition of being monitored compliantly for a period of 2 years. Department of Justice has
imposed an amount of $ 137 million for criminal charges and an additional amount of $144
million for violating civic rights accused by Securities and Exchange Commission. On the
other hand, Walmart’s Brazilian branches has been accused and found guilty of having
connections with the same violation.
Walmart has been accused for a period of 12 years from 2000 to 2011 by the
department of Justice and Securities and Exchange Board of USA. It has been found that

EHICS AND GOVERNANCE2
Walmart has made illegal payments to government officials, which were hidden, from the
internal accounting system of the company. However, the people concerned were aware of
the payments made to ease out business operations but they were not included in the
accounting books. Walmart’s global operations concerning India, Brazil, China and Mexico,
Walmart made illegal payments to the government officials of those countries to acquire
licenses and permits to open outlets in those countries. For the purpose, Walmart hired a third
party organization to do the dirty works on its behalf. It is stated that these problems of
internal accounting were reported to Walmart’s senior officials, but they took no steps. The
main purpose of these bribes were to fasten the licensing tenure against which they opened
the outlets in the cities of these foreign countries faster than the original time. This helped the
organization to incur improper and illegal profits, which was found later.
As stated by the Department of Justice, the above stated violations can be considered
as attributes, at least partially which helped Walmart to rapidly expand in the international
markets of the above-mentioned countries. According to Assistant General A. Benczkowski,
Walmart has made huge profits by rapidly expanding in these countries but undertook no
steps to avoid corruption. Therefore, the total cost of the investigation including a huge
number of lawsuits, legal fees and other expenses amounts to nearly $1 billion. This
corruption related activities were found out of investigation for almost eight long years. An
additional amount of $ 282 million had to be paid for settlement purposes. According to the
calculation, Walmart spent more than $ 269 million in the fiscal year 2018 for compliance
enhancement and investigations.
According to the department of Justice and Securities and Exchange Commission the
organization’s personnel were well aware of the corruption going inside the organization but
did not opt for correction due to the involvement of huge risks involved in the process.
Instead of clearing such corruptive issues the company chose to hire third party entities who