New York City files derivative suit vs. Wal-Mart
June 11 |
June 11 (Reuters) - New York City's pension funds on Monday became the latest group to file a derivative lawsuit against Wal-Mart Stores Inc based on reported allegations of bribery in Mexico and a possible cover-up by Wal-Mart officials.
The suit, filed in Delaware Chancery Court, alleges that Wal-Mart's officers and board of directors breached their fiduciary duty to both the company and shareholders by failing to properly handle claims of alleged bribery and apparently attempting to cover up details of the issue.
The issue was brought to light in an April 21 New York Times story which showed that bribes were paid by Wal-Mart de Mexico , or Walmex, and that Wal-Mart executives may have squelched an internal investigation into the matter.
"Rooting out the directors and executives responsible for the current crisis would be a first step, but Wal-Mart also needs corporate governance reforms and an independent board that will protect outside shareholders and safeguard against another breakdown of internal controls," New York City Comptroller John C. Liu said in a statement.
The lawsuit comes after the California State Teachers' Retirement System, or CALSTRS, filed a derivative lawsuit in Delaware Chancery Court in early May. In total, 11 derivative complaints were filed in April and May in Delaware and Arkansas tracking the allegations in the New York Times story, Wal-Mart previously said.
Wal-Mart could not be immediately reached for comment on Monday afternoon. On June 1, Wal-Mart said that while it could not predict the outcome of the various suits, it did not believe that the outcome would have a material effect on its financial conditions or results of operations.
Along with Comptroller Liu, the trustees of the New York City pension funds include the New York City Employees' Retirement System, the Teachers' Retirement System, the New York City Police Pension Fund, the New York City Fire Department Pension Fund and the Board of Education Retirement System.
The New York City Comptroller's Office was among a group of shareholders that voted against certain board members in Wal-Mart's recent election. It previously said that it voted its shares against Chairman Robson Walton, Chief Executive Michael Duke, former CEO Lee Scott, current audit committee chairman Christopher Williams and audit committee director Arne Sorenson.
While several directors received many more votes against them than usual, they were still elected with a majority of votes cast in their favor.
- Tweet this
- Share this
- Digg this