California Pension Fund Sues Wal-Mart, Alleges Bribery
California Pension Fund Sues Wal-Mart, Alleges Bribery, The second largest U.S. public pension fund said on Thursday it had sued current and former executives and board members at Wal-Mart Stores Inc (WMT.N), alleging bribery and a cover-up in the company’s expansion in Mexico.
The $153 billion (94 billion pounds) California State Teachers’ Retirement System (CalSTRS), which holds more than 5.3 million shares of Wal-Mart Stores Inc, said in a statement it had filed the derivative lawsuit in Delaware on behalf of the company.
The lawsuit is based on a story that appeared last month in the New York Times that reported Wal-Mart de Mexico (WALMEXV.MX), which is 69 percent owned by Wal-Mart, orchestrated a widespread bribery campaign to win market dominance.
The article alleged senior Wal-Mart executives knew about the matter and tried to cover it up.
“By utilizing the derivative action, CalSTRS is seeking to remedy the damages sustained by Wal-Mart as a result of alleged gross misconduct by Wal-Mart’s executive officers and directors,” CalSTRS Chief Executive Officer Jack Ehnes said in the statement.
“The focus of this action, unprecedented in CalSTRS history, is corporate governance reform to ensure that similar misconduct is not repeated in the future,” Ehnes said. “We need truly independent directors who will set the right tone from the top.”
The pension fund has retained the law firms of Girard Gibbs Llp and Labaton Sucharow Llp for the lawsuit, which was filed in the Court of Chancery in Wilmington, Delaware.
Defendants named in the lawsuit include Michael Duke, Wal-Mart’s chief executive and a board member, H. Lee Scott Jr., a board member and Duke’s predecessor as chief executive, and Eduardo Castro-Wright, chief executive of Walmex until 2005, when he was named chief executive of Wal-Mart Stores USA. (Reuters)