The $153 billion California State Teachers’ Retirement System (CalSTRS), which holds more than 5.3 million shares of Walmart stock, has sued the retail giant following allegations in April that executives in its Mexican division offered millions of dollars to Mexican officials in exchange for expediting building permits.
The charges led to an immediate 5% drop in the value of Walmart stock, although it has since partially rebounded.
If the allegations are true, Walmart violated the U.S. Foreign Corrupt Practices Act, which forbids bribes to foreign government officials. Walmart has been expanding rapidly in Mexico since 2007 and is the country’s largest private-sector employer.
Financial analysts say the accusations, if proven, could cost Walmart more than $4 billion in penalties, slower growth in Mexico and declining stock value.