May 4, 2012 (PLANSPONSOR.com) - The California State Teachers' Retirement System (CalSTRS) is suing Wal-Mart Stores Inc. executives and board members.
The lawsuit accuses Wal-Mart of using bribery and corruption to gain approval from Mexican government officials to build new stores. CalSTRS, the country's second-largest public pension fund, filed the derivative lawsuit seeking changes in the corporate governance of the world's biggest retailer, according tothe Los Angeles Times.
The CalSTRS complaint accuses Wal-Mart officials of failure to act despite evidence that corporate malfeasance and bribery were occurring in the retailer's Mexican operations, the newspaper reports. The suit also alleges that some senior Wal-Mart executives sold shares of company stock before The New York Times story that revealed the bribery allegations was published in April. Wal-Mart shares fell about 8% in the days after the report but have recovered slightly.
“CalSTRS 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," CalSTRS Chief Executive Jack Ehnes said, according to the Los Angeles Times. "The focus of this action, unprecedented in CalSTRS history, is corporate governance reform. We need truly independent directors who will set the right tone from the top."
CalSTRS owns more than 5.3 million Wal-Mart shares, valued at about $313 million.
New York City’s pension funds announced plans to vote their 4.7 million Wal-Mart company shares against five directors standing for re-election to the retailer’s board, citing the bribery allegations (see “NYC Pensions to Challenge Wal-Mart Board”).