Walmart, the world's largest retailer, has admitted it is investigating allegations that its managers in Mexico used widespread bribery to secure the company's presence in the country and expand its market share.
"This work is ongoing and continues today," David Tovar, vice president of corporate communications, said in a statement late on Saturday.
He added, however, that "We don't have a full explanation of what happened".
The admission followed an online report by the New York Times, which said that in September 2005, a senior Walmart lawyer received an e-mail from Sergio Cicero Zapata, a former executive at the company's largest foreign unit, Walmart de Mexico, describing how the subsidiary had paid bribes to obtain permits to build stores in the country.
In the e-mail and follow-up conversations, the former executive described how Walmart de Mexico, or Walmex as it is known locally, had orchestrated a campaign of bribery to win market dominance.
In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country, the Times reported, saying the attorney had the information because he had been in charge of securing construction permits.
When the Arkansas-based US retailer sent investigators to Mexico City within days they unearthed evidence of widespread bribery.
They found a paper trail of hundreds of suspect payments totaling more than $24m, but the company's leaders then shut down the investigation and notified neither US nor Mexican law enforcement officials, the Times reported.
According to the report, Mike Duke, current Walmart chief executive, and former CEO Lee Scott, who now sits on the company's board, were among senior executives allegedly aware of the situation.
The Times reported that Cicero, the former Walmex executive, gave names, dates and bribe amounts, adding that he knew so much because for years he had been the lawyer in charge of obtaining construction permits for the Mexican branch of the corporation.
Cicero identified Eduardo Castro-Wright as the driving force behind years of bribery, according to the Times, adding that no Walmex leaders were disciplined.
Castro-Wright became CEO of Walmex in 2003 and was named CEO of Walmart US in 2005. He became a vice chairman in 2008 and led e-commerce from 2010 until January of this year, and is set to retire on July 1. He could not be reached for comment.
Walmart found documents showing that Walmex's top executives not only knew about the payments, but had taken steps to conceal them from Walmart's headquarters in Bentonville, Arkansas, the Times reported.
Walmart hired Willkie Farr & Gallagher, a law firm with extensive experience in US Foreign Corrupt Practices Act (FCPA) cases, to look into the matter, but when the firm suggested a thorough investigation, it was rejected for a more "limited preliminary inquiry", the paper said.
The Times said Walmart's own lead investigator, a former FBI special agent, said there was reasonable suspicion to believe Mexican and US laws had been violated and had recommended an expanded investigation.
The Times said that in a meeting where the investigation was discussed, then-CEO Scott rebuked internal investigators for being too aggressive.
Days later, the paper said its records showed Walmart's top lawyer arranged to ship the internal investigators' files on the case to Mexico City.
Primary responsibility for the investigation was then given to the general counsel of Walmex, who was alleged to have authorised bribes, the Times said.
The general counsel then exonerated his fellow Walmex executives, the report said.
Walmart said in a statement on Saturday it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with the FCPA last year.
The company also said it had disclosed the probe to the US Department of Justice and the Securities and Exchange Commission.
"Many of the alleged activities in the Times article are more than six years old," said Tovar. "If these allegations are true, it is not a reflection of who we are or what we stand for."
The company said it had taken steps in Mexico to boost internal controls for stronger FCPA compliance. It declined to make any executives available for comment, and said the investigation was continuing.
Walmex has expanded rapidly since Walmart opened its first store outside the United States in Mexico City in 1991, then part of a joint venture.
In 2011, the Mexican unit reported total sales of $29bn. Walmart's fiscal 2012 sales, which for the year ended January 31, were $443.8bn.
There was little reaction in Walmart's shares on Saturday. The stock has gained about 17 per cent in the past 12 months