Wal-Mart Stores CEO Mike Duke defended the company's integrity amid reports of bribes paid to Mexican officials to expand market share, pledging to "get to the bottom" of the allegations.
"I want to personally assure you we're doing everything we can to get to the bottom of this matter. We will take appropriate action when the investigation is complete," Duke said in a speech Friday at Wal-Mart's annual shareholders meeting in Fayetteville, Arkansas.
Mexico's federal Attorney General's Office and Public Function Secretariat have opened separate investigations into alleged bribes paid by Wal-Mart's Mexican subsidiary to obtain fast-track approval of permits and expand its market presence.
"We're working to continually strengthen our compliance efforts around the world," Duke told around 16,000 shareholders.
The allegations against Wal-Mart de Mexico came to light in April, when The New York Times published an article indicating the company's largest foreign subsidiary paid bribes exceeding $24 million.
It said a former executive at the Mexican subsidiary blew the whistle, telling a Wal-Mart lawyer in September 2005 that "in its rush to build stores ... the company had paid bribes to obtain permits in virtually every corner of the country."
The Times story also said that Wal-Mart's own investigators subsequently unearthed evidence of "widespread corruption," but top executives of the Bentonville, Arkansas-based company "focused more on damage control than on rooting out wrongdoing."
The whistleblower, Sergio Cicero Zapata, who told the daily he resigned from Wal-Mart de Mexico in 2004 after organizing "years of payoffs," identified the subsidiary's then-chief executive, Eduardo Castro-Wright, as the "driving force" behind the bribery scheme.
But rather than being disciplined, the Times said Castro-Wright was promoted to vice chairman of Wal-Mart in 2008.
According to the daily, "bribery played a persistent and significant role in Wal-Mart's rapid growth in Mexico, where Wal-Mart now employs 209,000 people, making it the country's largest private employer."
But Duke, who took over as CEO in February 2009, said Friday that integrity is Wal-Mart's "bedrock" value.
"If you work for Wal-Mart, there is no gray area between right and wrong. It's either the right thing to do, or it shouldn't be done at all. We will not accept anything less than integrity."
In the wake of The New York Times' article, some shareholders have called for the removal of several members of Wal-Mart Stores' board of directors, including Duke and S. Robson Walton, the company's chairman and the son of Wal-Mart's founder, Sam Walton.