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 The issues were not material to the company's operations, Wal-Mart
China spokesman Raymond Bracy said in a statement on Thursday.
Wal-Mart implemented a "prescriptive action plan" after an extensive
investigation involving external legal and accounting firms.
Leadership changes were made and disciplinary action taken, Bracy
said in the statement, without giving details.
Bloomberg reported on Wednesday that Wal-Mart had used "questionable
accounting and unauthorized sales practices" to make its retail
business in China appear stronger at a time when transactions were
slowing and unsold inventory was piling up.
These practices included bulk sales to other retailers and temporary
mark-ups of inventory, Bloomberg reported, citing internal documents
and interviews with employees. (http://bloom.bg/1um3AjR)
Bulk sales are common practice in developing markets and represent a
"modest portion" of Wal-Mart's business in China, Bracy said in the
statement.
Wal-Mart is battling stiff competition from local rivals in China, a
market key to its international ambitions, where many consumers
value safe and authentic food over the low prices for which the
world's largest retailer is famed.
Wal-Mart, which has been in China for 17 years, is cutting jobs in
China to help lower its costs in the world's second-largest economy.
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Wal-Mart reported a 0.8 percent fall in China sales during the
quarter ended Oct. 31, which it attributed to government austerity
measures and deflation.
Wal-Mart's reputation for food safety in China has come under
scrutiny after its "Five Spice" donkey meat was found to contain fox
meat.
The retailer appointed Sean Clarke as Wal-Mart China CEO effective
June 1.
(Reporting by Adam Jourdan in Shanghai and Supriya Kurane in
Bengaluru; Editing by Gopakumar Warrier and Robin Paxton)
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