Walmart: In crisis over bribery allegations
Walmart was rocked this week by allegations that its top executives ignored evidence that the company paid millions of dollars in bribes to open stores in Mexico, said Jessica Wohl and Elinor Comlay in Reuters.com. The bribery allegations, detailed in a major investigative story in The New York Times, prompted a Justice Department investigation, and two U.S. lawmakers have announced their own inquiry. A resulting stock plunge wiped $10 billion off the company’s market value. Walmart executives in Bentonville, Ark., allegedly buried information about widespread bribes paid in Mexico, so as not to jeopardize meteoric growth in that country, now home to 20 percent of the retailer’s stores.
The blockbuster allegations could have major implications for the world’s largest retailer and its executives, said Anne D’Innocenzio in the Associated Press. If Walmart is found to have violated the Foreign Corrupt Practices Act, which prohibits bribes to foreign officials, the company could be on the hook for hundreds of millions of dollars in fines. Eduardo Castro-Wright, the former head of Walmart de Mexico and current vice chairman of Walmart, is among the top executives who could lose their jobs—or even go to jail. “This is going to be a major distraction for Walmart,” said business law professor Leonard Baynes of St. John’s University.
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Hollywood: Disney film chief exits
Rich Ross, the head of Walt Disney Studios, abruptly resigned last week after less than three years on the job, said Dawn C. Chmielewski and Rebecca Keegan in the Los Angeles Times. He “leaves a legacy of costly box-office flops,” including last year’s Mars Needs Moms, which cost $150 million to make but grossed just $39 million, and John Carter, which forced the studio to take a $200 million write-down, one of the biggest in movie history. Industry analysts say Ross, a former Disney television executive, never managed to adapt “to the world of film.”
