Sept 7, 2012 More bad news for Wal-Mart the giant chain store that owns 10,000 stores worldwide in the corruption charges of bribing Mexican officials to speed up development.
Walmart earnings world wide is 443.85 billion dollars and employs 2.2 million people mostly on low wages working part-time with a lack of benefits and healthcare coverages.
Walmart stock prices are falling today due to more of its own operating policies and how it does business in the real world.
Now a group of investors of WalMart stock is suing WalMart executives both past and present for their mishandling of the company.
The lawsuit filed in a Delaware Court aims to revamp how the company is being managed, and to see financial damages through their collective 5.6 million shares in WalMart Stores Inc.
The suit not only was filed to recover the losses and also to ensure that tightly regulated measures will revamp Wal-Mart’s governance and force them to comply with the law.
The NY city’s pension funds accuse Wal-Mart its directors, officials and executive for violating and breaching their fiduciary responsibilities to the company and its shareholders.
Investors Suing Wal-Mart
The group of investors include:
New York City Employees’ Retirement System
Police Pension Fund
Fire Department Pension Fund
Board of Education Retirement System
Altogether there were 10 pension funds affected by the bribery allegations who lost money and filings involving 12 lawsuits against Wal-Mart.
The California State Teachers Retirement System (CALSTRS) also filed a lawsuit in Delaware against Wal-Mart.
The combined value of the retirement funds are valued at 122 billion dollars in investments in Wal-Mart stocks.
Walmart was found to have used 24 million dollars to allegedly bribe Mexican officials to speed up building permits for their stores which contravenes the Foreign Corrupt Practices Act of 1977.
More lawsuits filed against Walmart were reported six months ago when the Mexico bribery charges were first exposed in the media, and which prompted a Justice Department and Congressional investigation.
A spokesperson for the New York City Comptroller’s office said this:
“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.
John C. Liu’s Press June 11, 2012 release can be found here:
As Comptroller Liu points out in his press release the Wal-Mart scandal affects more than 600,000 active and retired employees of the City of New York, who’s investment in Wal-Mart have suffered severe damage due to Wal-Mart’s executives who are now charged with major corruption charges.
The NY State Pension Fund represents one of the largest funds in the United States involving teachers, police, firemen, board of education and other employees pensions.
In total there are 27 WalMart executives including all the board members and CEO Mike Duke, former CEO Lee Scokt, the founder of WalMart Jim Walton, his chairman Robson Walton. The Mexican government is also conducting their own investigation against Walmart and the Vice Chair of the Mexico division Eduardo Castro-Wright is also named in the lawsuits.
Mike Duke the current CEO has held on to his seat despite a vote against him at the June 1, 2012 annual shareholders meeting.
However, the vote came before the lawsuits were filed and with the pressure building against these executives, the bribery case will continue to put pressure on them to resign.
Dave Tovar who spoke for Walmart said the company takes these allegations very seriously although an internal investigation was quashed by Walmart executives themselves to cover up the scandal before April 2012. Now the executives are looking into the lawsuits filed and are planning a legal battle to fight the charges.
For more details see:
June 11, 2012 AP: New York City Pension Funds Sue Wal-Mart
June 11, 2012 Wall Street Journal: New York City Pension Funds Files Shareholders Suit Against Wal-Mart
Wal-Mart now stands in violation not only of Securites and Exchange Commission regulations but also the Foreign Corrupt Practices Act involving not only Mexico but other countries.
Investigations are being conducted by the US. Justice Department, The Mexican government and a number of Mexican authorities investigating the bribery scheme as well as Congress.
Wal-Mart has hired a battery of high profile lawyers, accountants to fight the allegations.
Nasty Wal-Mart Smiley is in deep trouble
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