Photo: Walmart Stores (Flickr)
Pension funds that are Wal-Mart shareholders are suing the company for alleged bribery of Mexican officials. Even though an Indiana pension fund holds a very small portion of Wal-Mart’s total shares, its research could be the deciding factor in the lawsuit.
In April, the New York Times published an investigative article that said Wal-Mart’s Mexico subsidiary had been bribing Mexican officials to obtain store construction permits.
That sparked the California State Teachers’ Retirement System or CalSTRS and the city of New York to file suit against Wal-Mart directors, saying they breached their fiduciary duties to the company’s shareholders by covering up the scandal.
Then they asked a much smaller shareholder, Indiana Electrical Workers Pension Trust Fund IBEW, to join their suit.
The IBEW funds’ attorney Stuart Grant says the other plaintiffs were relying heavily on information from the New York Times article for their suit, but the Indiana pension fund properly requested company information that could reveal whether the executives knew about the bribery. And that information, Grant says, could hold up better in court.
“They used the tool at hand to make a demand on the company for its books and records so that they could have the accurate facts in order to put together a complaint that would withstand scrutiny,” he says.
The IBEW has not yet joined the full suit against the directors. But it has sued Wal-Mart to demand additional information. Wal-Mart spokesman David Tovar says the company has complied with all legal requests.
“We take our responsibility to our shareholders very seriously and we’re conducting a thorough investigation into the allegations presented in the New York Times article,” he says.
Grant says if his team’s investigation shows Wal-Mart directors failed to meet their legal duty, he might decide to file a further suit against the directors themselves.