News that Walmart execs quashed a probe into bribes paid by its Mexican subsidiary sent the company's shares tumbling nearly 5% yesterday, wiping around $10 billion off the company's market value. The stock of its Mexican subsidiary, which is accused of paying officials $27 million to speed up store-opening permits, dived 12%. Analysts believe that if the allegations are proven, it could cost Walmart up to $1 billion in penalties and could even lead to some execs spending time in prison.
The allegations have given ammunition to critics of Walmart expansion both in the US and abroad, reports the New York Times. In New York City, Walmart critics said the bribery probe has firmed up their opposition to the chain opening a store in the city. "This is precisely the type of business we do not want in our communities and I remain committed to fighting against Wal-Mart’s corporate poison from entering the five boroughs," City Council speaker Christine Quinn said. (Read more Walmart stories.)