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One of the nation's largest public pension funds has filed a lawsuit against current and former Wal-Mart executives and board members, saying they had 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 what's called a derivative suit late Thursday in state court in Delaware seeking changes in corporate governance and improvements in its internal procedures at the world's biggest retailer.

The pension fund is asking that any damages sustained as a result of the violations should 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," said Jack Ehnes, the pension fund's chief executive officer 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."

During a conference call with reporters on Friday, Ehnes said the alleged scandal could well be the "Fortune 100 version of Watergate."

The suit names several current executives including CEO Mike Duke and Vice Chairman Eduardo Castro-Wright as well as former executives including John Menzer. Menzer was vice chairman at the time of the alleged bribery scheme while Castro-Wright headed the Mexico operation. It also names all of Wal-Mart's board members including Lee Scott, who was CEO at the time of the alleged bribery scheme, and Jim C. Walton and Robson Walton, members of the founding family of Wal-Mart.

Greg Rossiter, a spokesman for Wal-Mart said in a statement, "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."

The suit comes two weeks after The New York Times reported that Wal-Mart allegedly 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 favors. It's unclear whether board members knew about the alleged bribery scheme.

The paper reported that Wal-Mart executives failed to notify law enforcement even after its own investigators found evidence of millions of dollars in bribes funneled through its Mexican unit. Such alleged practices would be a violation of the 1977 Foreign Corrupt Practices Act, which prohibits U.S. companies from bribing foreign officials.

Wal-Mart said that it's doing its own investigation and has met with officials from the Securities and Exchange Commission and the Justice Department to discuss the ongoing probe.

The Mexican government announced that it's doing its own probe..

Earlier this week, the New York City Pension Funds urged shareholders to vote against the re-election of Wal-Mart's Duke and four other board members due to concerns about the bribery allegations in Mexico. The pension group owns 5.6 million shares of Wal-Mart, which has more than 3.4 billion shares outstanding.

Wal-Mart's share slipped 17 cents to $58.82 in afternoon trading. Its shares are down about 6 percent since news of the alleged bribery scheme surfaced.

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