Mexico enacts anti-corruption law as Wal-Mart scandal worries
As shock waves stemming from Wal-Mart’s corruption case began to ripple across Mexico, the government on Thursday approved the nation’s first anti-corruption law.
The move appeared orchestrated to coincide with the Mexico comptroller’s office announcement 24 hours earlier that it will investigate the widening bribery case, caving into international and local anti-corruption officials and politician’s pressure that it nust get to the bottom of it.
The ordeal has sent Walmart de Mexico’s shares plummeting in recent days. On Thursday, the share closed at 28.7 pesos, down from a 52-week high of 35 pesos.
“The government is very worried and they are going to investigate this,” said Pedro Hernandez, a partner at PWC Mexico’s M&A practice.
Hernandez said it’s pivotal for Mexico to probe the case and punish its regional government officials and Walmart, if they are found guilty. Failing to do so will scare foreign investors away from the country, which is already suffering from heavy drug-related crime, he noted.
Mexico is expected to benefit from investors´ growing interest in the high-performing emerging markets as the world continues to rile under a stinging recession. According to Hernandez, the government expects to attract $19.8 billion in foreign direct investment this year, a huge jump from 2011′s $14.6 billion.
“But if something goes wrong with Walmart, if they don’t pursue this case, all of this could fall down,” Hernandez warned.