Walmart expands its bribery investigation
Kai Ryssdal: Honestly, if you were gonna dump some bad news on the market, today would be a pretty good day, right? Hiding under cover of Facebook, if you will.
Walmart shares had another good day today after the world’s biggest retailer reported better-than-expected quarterly profits. Never mind it also told investors it’s trying to figure out exactly how well it follows American anti-corruption laws.
Marketplace’s Bob Moon has that story.
Bob Moon: Get used to hearing this if you’re a Walmart investor. During his conference call announcing quarterly earnings yesterday, chief executive Michael Duke couldn’t avoid addressing the bribery scandal involving Wal-Mart’s operations in Mexico.
Michael Duke: We are working aggressively to determine what happened, and we will take appropriate action if violations of the law or our policies occurred.
He spoke as the company revealed it’s widened its investigation to look for possible bribery in countries beyond Mexico. But investors took that news in stride. In fact, as of today, the stock has recovered virtually all the value it lost after the New York Times broke the bribery story last month.
At Wayne State University, law professor Peter Henning says Wall Street seems to be more comfortable that the corruption case is manageable — although that could change.
Peter Henning: I guess the question is, for the market, are there any more shoes that are going to drop.
Even if there aren’t, Henning says Walmart executives could become increasingly distracted from running the company.
Henning: Management’s going to have to spend a lot of time focusing on this, and then of course dealing with all the other fallout — public relations, private lawsuits, things like that.
Another expert on the bribery law doubts the case will ever become a real threat to Walmart’s business. Butler University professor Michael Koehler says even if the punishment were to match the biggest fine to date…
Michael Koehler: We’re looking at an $800 million fine and penalty. That amount clearly is not material, even though its a big number, to a company like Walmart.
…which reported revenue of more than $400 billion last year.
Koehler thinks the biggest damage will be the drawn-out focus on Walmart’s ethics.
I’m Bob Moon for Marketplace.
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