Wal-Mart bribery: Mexico opens investigation as WMT shares continue to drop

Federal authorities in Mexico announced Wednesday* they would investigate to determine if government officials at the national level were involved in alleged bribery by the US retail giant Wal-Mart, according to The Associated Press.

According to media reports yesterday, the US Justice Department in December opened a probe of Wal-Mart after the company disclosed to market regulators that it was conducting an internal review of operations in Mexico.

More from GlobalPost: Wal-Mart: Mexican bribery allegations now under US federal investigation

Shares in the company have continued to slide for a third straight day, closing today at $57.36, representing a drop of more than 8 percent since the April 20 intraday high of $62.45 and more than wiping out this year’s gains.

The drop was precipitated by a blockbuster New York Times article on Saturday which reported that the company had squelched an internal probe that concluded that its Mexican subsidiary had paid $24 million in bribes to Mexican officials.

According to the AP, Mexico’s Public Administration Department had previously suggested that the bribery allegations only concerned state officials. But the news service now reports that the anticorruption agency says it will examine if federal officials might have been involved.

On Wednesay, Mexico's President, Felipe Calderon, said that he felt "indignant" about the situation, reported Reuters.

"The company has certainly generated many jobs in Mexico and done good things, but what's not right is doing business on the basis of bribes," he stated.

The Financial Times reported yesterday that Eduardo Castro Right, who headed Wal-Mart de Mexico from 2002 to 2005, had resigned from the board of MetLife to devote himself to defending his reputation.

The New York Times had reported that one former executive had identified Castro Wright, who was promoted to vice-chairman of Wal-Mart in 2008, as “the driving force behind years of bribery.”

Also on Wednesday, two Congressional democrats said they would expand the US inquiry to trade association groups such as the US Chamber of Commerce, which sought to amend Watergate-era legislation on US companies bribing foreign government officials.

The comments come after a Washington Post report revealed that a top Wal-Mart official sat on the board of the US Chamber’s legal reform institute, which worked to amend the legislation.

* Correction: A previous version of this story incorrectly said Mexican authorities had announced their inquiry on Monday.