An Indiana union pension fund that holds shares in Wal-Mart Stores Inc has sued the company to gain access to thousands of internal documents related to allegations that a Wal-Mart subsidiary bribed Mexican government officials.
The complaint is the latest challenge to Wal-Mart following a report by The New York Times in April that said Wal-Mart had found evidence its Mexican subsidiary, Wal-Mart de Mexico, allegedly paid bribes to facilitate the awarding of store permits. The paper at the time reported the company's corporate headquarters stifled an internal probe into the allegations.
Investors in light of the Times' article sued Wal-Mart and its board of directors in Delaware's Court of Chancery. The lawsuits accused the company's officers and directors of breaching their fiduciary duties to Wal-Mart and its shareholders.
The latest lawsuit, also filed in the Delaware Court of Chancery, said the company had made a "woefully deficient" production of documents following an earlier out-of-court demand. What documents were produced were "so heavily redacted," or blacked out, they were nearly worthless, the pension fund said.
The complaint, made public Thursday, is itself redacted. Wal-Mart was given three days to redact the complaint, which was filed Monday.
"Wal-Mart's overuse of redactions is unjustified," the Indiana Electrical Workers Pension Trust Fund IBEW said in the complaint.
The lawsuit also said an unnamed whistleblower had mailed documents to the fund's lawyers "substantiating numerous facts" in the Times' article related to bribes paid by Wal-Mart de Mexico, or WalMex.
The whistleblower's documents include e-mails from individuals involved in a 2005-2006 internal investigation at Wal-Mart, the complaint said.
Officials at Wal-Mart did not respond to a request for comment after normal business hours.
Wal-Mart, which is engaged in an internal investigation, has said it is cooperating with the U.S. Department of Justice and the Securities and Exchange Commission in their own probes.
Anticipation for the Indiana union pension fund's complaint had mounted after Delaware Chancellor Leo Strine, the court's top judge, declined in July to name two other pension fund shareholders as lead plaintiffs in the consolidated litigation.
Strine at the time criticized those funds, the California State Teachers' Retirement System and New York City's public pension funds, for basing their lawsuits on The New York Times report rather than conducting their own investigations.
The judge at the time noted the Indiana fund had, by contrast, demanded that Wal-Mart's board provide it access to the company's books and records.
But the Indiana fund, which is the pension fund for the local arm of the International Brotherhood of Electrical Workers, said in its complaint that nearly half of 3,474 pages of documents Wal-Mart produced in response to its demand were entirely blacked out.
The lawsuit seeks an order requiring Wal-Mart to permit inspection and copying of all of the books and records the plaintiff demanded.
The case is Indiana Electrical Workers Pension Trust Fund IBEW v. Wal-Mart Stores, Inc., Delaware Court of Chancery, C.A. No. 7779-CS
© Thomson Reuters.
