NEW YORK, N.Y. – A federal appeals court has rejected a shareholder lawsuit filed against key directors at Wal-Mart Stores Inc. that claimed they allowed and concealed alleged bribery in the company’s Mexico division.
Chief Judge William Riley wrote for the 8th U.S. Circuit Court of Appeals that shareholders, including the Louisiana Municipal Police Employees’ Retirement System, did “not give rise to a reasonable reference” that the board of directors learned of the suspected bribery while it was being covered up and the internal investigation squashed. It upheld an Arkansas district court’s dismissal.
The case followed a New York Times report that Wal-Mart’s Mexican unit paid millions in bribes to speed building permits.
Wal-Mart said the ruling showed the board of directors, not individual shareholders, has authority to manage those kinds of corporate matters.