Coca-Cola agrees to $137.5 mln settlement in case

By: trademagazin Date: 2008. 07. 08. 00:00

A shareholder lawsuit claimed the world's largest soft drink maker artificially inflated sales to boost its stock price, according to court documents.


The lawsuit, filed in October 2000,
claimed that in 1999 Coca-Cola had forced some bottlers to purchase
hundreds of millions of dollars of unnecessary beverage concentrate
in an effort to make its sales seem higher.

Institutional investors, led by
Carpenters Health & Welface Fund of Philadelphia & Vicinity,
said the practice, known as "channel stuffing,"
artificially inflated Coca-Cola's results and gave investors a false
picture of the company's health.

Without admitting any wrongdoing,
Coca-Cola agreed to the settlement on June 26, according to court
documents obtained by Reuters. The settlement was filed with the
court on July 3.

Coca-Cola had previously denied any
wrongdoing or liability, but agreed to settle the case to avoid
lengthy and uncertain litigation, the settlement said.

The settlement applies to anyone who
acquired Coca-Cola common stock from Oct 21, 1999 through March 6,
2000, according to the settlement agreement, which was filed with the
U.S. District Court for the Northern District of Georgia.

In 2005, Coca-Cola settled a similar
issue over the sale of excess beverage concentrate to bottlers in
Japan between 1997 and 1999.

"Coca-Cola misled investors by
failing to disclose end-of-period practices that impacted the
company's likely future operating results," the U.S. Securities
and Exchange Commission said at the time.

Coca-Cola admitted no wrongdoing and
paid no fines in that settlement pact, but agreed to cease and desist
from future securities violations and maintain tight internal
controls on sales to bottlers and customers. The U.S. Department of
Justice had closed an investigation without filing charges against
the company.

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