Amid bribery scandal, Wal-Mart talks integrity

By Jessica Wohl and Lisa Baertlein, Reuters

FAYETTEVILLE, Arkansas -- ?Top executives of Wal-Mart Stores Inc did not directly mention a Mexican bribery scandal at an employee pep rally on Wednesday, but asked their international workers to focus on "integrity" as a core value.

The world's largest retailer has been under fire from shareholders and activists after the New York Times reported in April that management at Wal-Mart de Mexico, or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly last decade and that Wal-Mart's top brass tried to cover it up.

The matter is being investigated by a number of government agencies in Mexico and the U.S. Department of Justice and the U.S. Securities and Exchange Commission. Wal-Mart is also conducting an internal probe.

Executives talked around the allegations in Mexico, the company's first and largest international market. They referenced integrity as one of the company's core values and underscored the importance of complying with local laws.

"It's doing the right thing, every single day," Wal-Mart President and Chief Executive Officer Mike Duke told international workers gathered at the University of Arkansas' Barnhill Arena.

Doug McMillon, president and CEO of Walmart International, said it was up to every employee -- from new associates to top executives -- to guard the company's principles.

"If you see something in your business that you don't think is right, you need to say something," McMillon said.

Scot Rank, president and CEO, Walmart Mexico and Central America, may have come the closest to directly on the allegations, without specifically mentioning bribery.

"Over the years we have faced difficult and challenging times in Mexico and Central America. These events have united us even more, they have motivated us to continue, to continue pursuing excellence, and work with respect and integrity," Rank said at the end of the Mexico and Central America unit's presentation.

Wal-Mart's focus in China, the world's fastest-growing major economy, will be on expanding the right way, Scott Price, president and CEO of Walmart Asia, said earlier in the morning.

"We have to be compliant, we have to follow every rule, every regulation in the country," Price said.

Shareholders, including some of the largest U.S. public pension funds, have called for Duke, former Wal-Mart Stores CEO Lee Scott, Chairman Robson "Rob" Walton and others to be ousted from the company's board of directors in the wake of the Mexico scandal. But such efforts have little chance of succeeding because the family of founder Sam Walton controls roughly half of Wal-Mart's shares and votes.

More than 1,300 international employees traveled to northwest Arkansas for this week's events, which culminate in Friday's annual shareholders meeting.

During Wednesday's meeting, as in previous years, a selection of top international employees were given "Integrity in Action" awards.

Despite the bribery allegations, this year's celebration is still expected to be an upbeat affair. Wal-Mart is marking 50 years since Walton opened the first Walmart store on July 2, 1962, and at Wednesday's meeting representatives from Chile played a video of employees in that country singing "Happy Birthday."

Company shares, which have more than rebounded from the roughly 8 percent drop in the days following the New York Times Mexico story, are trading near all-time highs. The stock was up 16 cents at $65.84 at midday on Wednesday after rising to $65.95.

Copyright 2011 Thomson Reuters. Click for restrictions.

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