Quantcast
Latest Stories

New York City pension funds sue Wal-Mart

By

In this Feb. 20, 2012, file photo, customers walk into and out of a Wal-Mart store in Methuen, Mass. Wal-Mart Stores Inc. reported a 10.1 percent increase in first-quarter profit that beat Wall Street estimates, reported Thursday, May 17, 2012. The world’s largest retailer also offered an upbeat profit outlook for the current quarter. (AP Photo/Elise Amendola, File)

NEW YORK – A group of New York City pension funds is suing current and former Wal-Mart executives, saying they mishandled an alleged Mexican bribery scheme at the world’s largest retailer.

The group filed a lawsuit on Monday in court in Delaware on behalf of the company itself against the executives.

The goal in such cases, known as “derivative actions,” is to change the way a company is run. As with other derivative actions, the plaintiffs are seeking to recover any fines or other financial damages that Wal-Mart faces as a result of the violations and have the money be awarded to the company. The pension funds own 5.6 million shares of Wal-Mart Stores Inc.

This is the latest of at least a dozen such lawsuits filed against Wal-Mart since the New York Times reported in late April that Wal-Mart’s Mexican unit allegedly paid millions of dollars in bribes to win favors. The Times said executives didn’t notify authorities even after Wal-Mart found evidence of the scheme.

“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,” said Jon Liu, New York City Comptroller in a statement.

Dave Tovar, a Wal-Mart spokesman, also issued a statement.

“We take our responsibility to our shareholders very seriously,” Tovar said. “We will review the lawsuit closely and are thoroughly investigating the issues that have been raised.”

The lawsuit names 27 current and former Wal-Mart executives including all its current board members, except one. The board roster includes CEO Mike Duke, former CEO Lee Scott and descendants of the company’s founder, Jim Walton and board Chairman Robson Walton. The exception is Marissa Mayer, vice president for local, maps and location services at Google Inc., who was elected to the board for the first time this month.

The suit also names Eduardo Castro-Wright, who is retiring this month as vice chairman but is not on the company’s board. Castro-Wright led Wal-Mart’s Mexico division at the time of the alleged bribery and when the probe began in 2005.

In early May, the New York City Pension Funds urged shareholders to vote at the company’s annual meeting on June 1 against the re-electing Duke and four other board members because of the bribery allegations in Mexico.

All members kept their seats. But Monday’s lawsuit by the New York City Pension Funds comes a week after a final shareholder tally showed discontent rising against key executives and board members, including Duke, over the bribery allegations.

All of the company’s nominees were re-elected. But the rise in votes against key leaders underscores how the bribery case could distract the world’s largest retailer as it tries to continue its sales momentum in the U.S. and overseas

Tovar reiterated on Monday that Wal-Mart is committed to a “full and independent investigation.”

“A thorough investigation will take time and we are in the early stages. It would be inappropriate for us or others to come to conclusions before the investigation is complete,” Tovar said.


Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: bribery , Crime , New York City , Wal-Mart




Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Drilon calls for sobriety as mudslinging, witch hunts loom due to pork scam
  • S. Korea ferry toll hits 150 as search gets tougher
  • If Napoles names Aquino allies, they’ll be brought to bar of justice – Palace
  • Lacson says diamond-studded earring snatched from wife fake
  • Pope John XXIII launched Vatican II and then some
  • Sports

  • Wizards beat Bulls in OT to take 2-0 series lead
  • Pacers rally past Hawks 101-85 to even series
  • David Moyes out as Manchester United manager
  • Nadal to face fellow Spaniard at Barcelona Open
  • Defensive Chelsea holds Atletico in scoreless draw
  • Lifestyle

  • Haneda International Airport: A destination on its own
  • Wanted: Beauty queen with a heart that beats for the environment
  • Kim Atienza: At home with art and design
  • Life lessons I want to teach my son
  • Sweet party for Andi Manzano
  • Entertainment

  • Ex-Fox exec denies allegations in sex abuse suit
  • Kris Aquino backtracks, says Herbert Bautista and her are ‘best friends’
  • Summer preview: Chris Pratt enters a new ‘Galaxy’
  • Bon Jovi helps open low-income housing in US
  • Summer movie preview: Bay reboots ‘Transformers’
  • Business

  • McDonald’s 1Q profit slips as US sales decline
  • SEC approves SM’s P15B retail bond offer
  • $103M Vista Land bonds tendered for redemption
  • Oil slips to $102 as US crude supplies seen rising
  • SC stops Meralco power rate hike anew
  • Technology

  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Brazil passes trailblazing Internet privacy law
  • New York police Twitter campaign backfires badly
  • Opinion

  • One-dimensional diplomacy: A cost-benefit analysis of Manila’s security deal with Washington
  • No ordinary illness
  • Reforest mountains with fire trees and their kind
  • Day of the Earth
  • When will Chinese firm deliver new coaches?
  • Global Nation

  • No word yet on inking of US-PH defense pact during Obama visit
  • Filipina, 51, shot dead by 24-year-old American boyfriend
  • China, rivals sign pact to ease maritime tensions
  • Visa-free US trip? Do not believe it, says consulate
  • Obama visit to Asia seen as counterweight to China
  • Marketplace
    Advertisement