* Lawsuit seeks to recover damages to Wal-Mart reputation
* Targets board, three former Walmex officials
* Lawsuit adds to Wal-Mart’s growing legal problems
WILMINGTON, Del, April 25 (Reuters) – A shareholder sued the
board and several officers of Wal-Mart Stores Inc on
Wednesday over allegations that the company’s Mexican affiliate
paid bribes to local officials, adding to the company’s legal
problems.
The lawsuit seeks to recover damage to the company’s
reputation as well as costs of investigating the claims,
according to the complaint, which was filed in the Court of
Chancery in Delaware, where Wal-Mart is incorporated.
The “illegal payments have and will continue to irreparably
damage Wal-Mart’s corporate image and goodwill and jeopardize
its ability to do business in foreign countries,” said the
lawsuit, which was brought by Henrietta Klein.
The complaint was filed as a derivative lawsuit, which seeks
to recover money on behalf of the company rather than
shareholders.
“We’ve received the lawsuit and are reviewing it closely,”
said a statement from company spokesman Dave Tovar. “The claims
in this complaint (relate) to allegations raised a few days ago
against the company and are being investigated thoroughly.”
On Saturday, the New York Times reported that a senior
Wal-Mart lawyer received an email from a former executive at
Wal-Mart de Mexico in September 2005 that described
how the Mexican affiliate, known as Walmex, had paid bribes to
obtain permits to build stores in the country.
According to the Times, Wal-Mart sent investigators to Mexico
City and found a paper trail of suspect payments totaling more
than $24 million. But the company’s leaders shut down the probe
and did not notify U.S. or Mexican law enforcement officials
until after the newspaper informed Wal-Mart it was looking into
the issue, the Times reported.
The company’s share price fell on Monday and Tuesday
following the Times report, wiping out gains for the year.
Shares of the world’s large retailer closed Wednesday down 0.7
percent, or 41 cents lower, at $57.36 on the New York Stock
Exchange.
Mexico’s federal comptroller’s office said on Wednesday it
would open an investigation into the bribery allegations.
Wal-Mart has said it disclosed the bribery allegations to
the U.S. Department of Justice and Securities and Exchange
Commission.
In addition to the current members of the board, the lawsuit
also named as defendants three people who were top officials
with Walmex in 2005.
Eduardo-Castro Wright was the CEO of Walmex until 2005, when
he was named chief executive of Wal-Mart Stores USA. According
to the Times he was a driving force behind years of bribery.
Eduardo Solorzano was the CEO of Wal-Mart Mexico in 2005 and
is currently the CEO of Wal-Mart Latin America.
Jose Luis Rodriguezmacedo Rivera was the general counsel in
Mexico in 2005 and was president of legal, ethics and compliance
at Walmex until he resigned on Friday, according to the lawsuit.
The lawsuit is the second action brought by the plaintiff
over the bribery allegations, according to the complaint. In
December, Klein’s lawyers wrote to the Chairman Robson Walton to
demand access to the company’s records to determine if the board
had breached its fiduciary duties after disclosing an internal
bribery investigation.
Klein’s request was refused because Wal-Mart determined that
there was “no credible basis to infer that the company’s board
of directors has engaged in wrongdoing or mismanagement,”
according to the lawsuit.
The case is Henrietta Klein v S. Robson Walton et al,
Delaware Court of Chancery, No. 7455.
