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Winnipeg Free Press - PRINT EDITION
Pension fund files suit over Wal-Mart allegations
Jin Lee / Bloomberg News archives Wal-Mart faces bribe allegations. (BLOOMBERG BLOOMBERG NEWS)
NEW YORK -- One of the largest public pension funds in the U.S. has filed a lawsuit against current and former Wal-Mart executives and board members, saying they breached their responsibility in handling an alleged bribery scheme.
The California State Teachers' Retirement System, which holds more than 5.3 million shares of Wal-Mart Stores Inc., filed a lawsuit late Thursday in state court in Delaware seeking changes in corporate governance and improvements in internal procedures at the world's biggest retailer.
The pension fund is asking that any damages sustained as a result of the violations be awarded to the company, which is based in Bentonville, Ark.
The action marks the pension fund's first derivative lawsuit. This type of suit is brought by a shareholder on behalf of a corporation against a third party. The goal of the plaintiffs is not to reap big financial rewards but to change corporate governance.
"By utilizing the derivative action, (the pension fund) 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," Jack Ehnes, the pension fund's CEO, said in a statement. "The focus of this action... is corporate governance reform to ensure that similar misconduct is not repeated in the future. We need truly independent directors who will set the right tone from the top."
The suit names current executives, including CEO Mike Duke and vice-chairman Eduardo Castro-Wright, former executives and all board members, including former CEO Lee Scott and Wal-Mart founding family members Jim C. Walton and Robson Walton.
"We take our responsibility to our shareholders very seriously. We are reviewing the lawsuit closely and are thoroughly investigating the issues that have been raised," a spokesman for Wal-Mart said in a statement.
The suit comes two weeks after The New York Times reported allegations that Wal-Mart covered up results of an internal probe that showed its Mexican subsidiary bribed officials there in 2005 and 2006 in exchange for speedier building permits and other favours.
-- The Associated Press
Republished from the Winnipeg Free Press print edition May 5, 2012 B10
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