SACRAMENTO — The California State Teachers' Retirement System is suing Wal-Mart Stores Inc. executives and board members, accusing them of using bribery and corruption to gain approval from Mexican government officials to build new stores.
Late Thursday, the board of CalSTRS, the country's second-largest public pension fund, filed the so-called derivative lawsuit seeking changes in the corporate governance of the world's biggest retailer.
For The Record
Los Angeles Times Sunday, May 06, 2012 Home Edition Main News Part A Page 4 News Desk 1 inches; 54 words Type of Material: Correction
CalSTRS lawsuit: An article in the May 4 LATExtra section about the California State Teachers' Retirement System suing Wal-Mart Stores Inc. executives and board members erroneously referred to the retirement system in one instance as CalPERS, rather than CalSTRS. CalPERS -- the California Public Employees' Retirement System -- is not involved in the lawsuit.
"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. "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 as of Tuesday.
Accusations that widespread bribery was used to grease the way for Wal-Mart expansion in Mexico were first reported by the New York Times.
State Treasurer Bill Lockyer, a member of the CalSTRS board, backed the pension fund's decision.
"This is a classic case of corruption and coverup," he said. "The victims include Wal-Mart, and this lawsuit aims to make sure the company gets compensated for the damage caused by this outrageous conduct."
The CalPERS complaint accuses Wal-Mart officials of failure to act despite evidence of corporate malfeasance and bribery.
The suit also alleges that some Wal-Mart executives sold their shares before the New York Times story was published April 21.
Wal-Mart shares fell about 8% in the days after the report but have recovered slightly.
The bribery allegations are being investigated by Mexican government agencies and the U.S. Securities and Exchange Commission.
Under the Foreign Corrupt Practices Act, it's illegal for American companies to bribe officials of other governments.