Wal-Mart Told by Court to Turn Over Bribery Probe Files

Wal-Mart Stores Inc. must hand over to investors internal documents about what directors and executives knew of alleged bribes tied to Mexican real-estate deals, the Delaware Supreme Court ruled.

The court today upheld a lower-court decision in favor of pension funds seeking the files to buttress lawsuits against Wal-Mart directors over the scandal. The funds sought officer-level documents and information about the company’s internal probe of the allegations.

The supreme court said the investors showed the documents were essential to their investigation of the bribery and how the internal investigation was handled.

Wal-Mart, based in Bentonville, Arkansas, said in March that it spent $439 million over the past two years in connection with investigations into allegations employees paid foreign bribes. Federal prosecutors have also looked into possible illegal payments made by Wal-Mart officials in China, India and Brazil.

Internal documents showed Wal-Mart’s Mexican unit used a state governor in Mexico to facilitate $156,000 in bribes, Bloomberg News reported last year. The files were released by Democratic representatives Henry Waxman of California and Elijah Cummings of Maryland, who are also investigating the matter.

Wal-Mart argued it didn’t have to disclose the files because they were private communications with its attorneys.

Procedural Questions

“Today’s ruling was limited to procedural questions about whether plaintiffs had the right to inspect certain company documents,” Brooke Buchanan, a Wal-Mart spokeswoman, said in an e-mail. “It had nothing to do with the merits of the allegations.”

The company’s internal investigation hasn’t reached a final conclusion, she said.

“Now finally after two years we will get the documents we are entitled to,” Stuart Grant, an lawyer for investors, said in an e-mail. Grant provided a copy of today’s ruling, which wasn’t available from the court.

U.S. and Mexican prosecutors are investigating the bribery allegations. Those probes were started after the New York Times reported that officials of Wal-Mart’s Mexican unit alerted the retailer in 2005 about bribes paid to get new stores and warehouses built.

At least $24 million in “suspect payments” were made as part of the scheme, the Times said, citing the company’s internal files. The newspaper also said Wal-Mart executives in the U.S. and Mexico limited the company’s investigation into the scheme and failed to disclose the payments in securities filings until 2011.

The case is Indiana Electrical Workers Pension Trust Fund IBEW v. Wal-Mart Stores Inc., CA No. 7779-CS, Delaware Chancery Court (Wilmington). The Supreme Court case is Wal-Mart Stores v Indiana Electrical Workers Pension Trust Fund IBEW, No. 614,2013, Delaware Supreme Court (Wilmington).

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