Wal-Mart Officers, Directors Sued

Shareholder claims mismanagement led to alleged bribery of Mexican officials.

Wal-Mart Stores Inc. was sued by a shareholder claiming mismanagement by its executives and directors mismanaged the company led to alleged bribery of officials in Mexico and coverup of an internal probe.

Company officers and directors responsible for the wrongdoing should reimburse Bentonville, Arkansas-based Wal-Mart for damages related to the investigation and the alleged bribery, investor Henrietta Klein said in a Delaware Chancery Court complaint filed today in Wilmington.

Officials “are required to use their utmost ability” to manage Wal-Mart fairly, and have shown “a reckless disregard for their duties” and “should have been aware” of “a risk of serious injury to the company,” Klein said in the complaint.

The U.S. government investigation into $24 million in alleged bribes to officials in Mexico as the company expanded there could cost the world’s largest retailer hundreds of millions of dollars, according to former federal prosecutors.

“We’ve received the lawsuit and are reviewing it closely,” David Tovar, a Wal-Mart spokesman, said in an e-mailed statement. “The claims in this complaint relate to allegations raised a few days ago against the company and are being investigated.”

Klein also contends Wal-Mart officials failed to comply with the U.S. Foreign Corrupt Practices Act of 1977 and other anti-bribery statutes.

Twenty percent of the company’s more than 10,000 stores worldwide are in Mexico, following Wal-Mart de Mexico SAB’s rapid growth in the past 10 years.

Wal-Mart fell 42 cents to $57.35 in New York Stock Exchange composite trading at 3:31 p.m.

The case is Klein v. Walton, CA7455, Delaware Chancery Court (Wilmington).

 

Bloomberg News

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