Complaint Filed with SEC over Coca-Cola's Failure to Disclose Legal Problems in Mexico

Despite Lawsuits and a Government Investigation in Mexico that Could Cost Shareholders Billions of Dollars, Coke Refuses to Address Potential Liabilities

For Immediate Release:
Contact: Pat Clark
info@corporatecampaign.org
718-852-2808

NEW YORK, June 14, 2011-Ray Rogers, Director of Corporate Campaign, Inc. (CCI) and the Campaign to Stop Killer Coke filed a complaint on June 6, 2011, with the U.S. Securities and Exchange Commission (SEC), urging the regulatory agency to investigate violations of U.S. securities law committed by The Coca-Cola Company and its Chief Executive and Chairman Muhtar Kent.

CCI's complaint to the SEC involves Coca-Cola's and Mr. Kent's public denial of the existence of an ongoing series of lawsuits and government investigation regarding the company's operations in Mexico that could potentially cost Coca-Cola and its shareholders billions of dollars. (See complaint below.)

In its complaint to the SEC, Mr. Rogers outlined Coca-Cola's clear violation of this nation's securities laws, in accordance to the Securities Exchange Act of 1934, and its Anti-fraud provision, outlined in Section 10(b), which was codified in SEC Rule 10(b)-5. The Rule reads, in part, that it is illegal to "omit to state a material fact" if such omission makes other statements untrue.

The Coca-Cola Company-in its SEC filings or in its executives' public statements-has refused to acknowledge a series of lawsuits filed in Mexico, dating back to 2007, that detail the company's participation in an ongoing 24-year conspiracy to de-fraud Mexican workers out of legally mandated compensation and to cheat the Mexican government out of lawful tax revenue through a scheme of outsourcing and tax evasion.

In addition, Mr. Kent took the additional step of publicly denying the existence of the lawsuits and government investigation before the entire Annual Meeting of Shareholders in April when asked directly about the situation by Mr. Rogers. Mr. Kent replied that any claim that Coca-Cola was facing such legal problems in Mexico were "false" and had "no merit". Documents obtained by the Campaign to Stop Killer Coke show that Mr. Kent knew of the Mexican situation and its larger implications as early as December 2009.

"It is clear that Mr. Kent has lied to and tried to mislead both shareholders and the investment community, in regards to the company's situation in Mexico," according to CCI's SEC complaint. "He has also withheld information of potential liabilities that the investment community should be aware of because they could cost the company billions of dollars in fines, restitution and legal damages."

At Coca-Cola's annual shareholders meeting on April 27, Mr. Kent boasted that he had spent a lot of time meeting with government officials in Mexico and that he had "very recently received a letter by the Mexican president, Mr. Calderon, inviting the Board of Directors to have a meeting in Mexico."

"Does Mr. Kent think he can peddle his influence with the highest levels of the Mexican government all the way to President Calderon, and get away with violating Mexican laws with impunity?" said Mr. Rogers.

In the complaint, Rogers strongly urged SEC investigators to examine Mr. Kent's comments and compel The Coca-Cola Company and Mr. Kent to make full disclosure about this situation in order to fully comply with this nation's securities laws.

For further information on Coca-Cola's abuses in Mexico, go to http://www.KillerCoke.org/crimes_mexico.php

-end-

SEC Complaint

Reference #: TCR1307395939385

I want to make the Securities and Exchange Commission aware of what I believe is an SEC Rule 10(b)-5 violation by the Chief Executive Officer and Chairman Muhtar Kent of The Coca-Cola Company.

During the company's Annual Meeting of Shareholders, held on April 27, 2011, in Atlanta, Ga., I-as a shareholder of the company's stock-was able to publicly ask Mr. Kent why the company, in neither its SEC filings nor in its executives' public statements, has not acknowledged a series of lawsuits filed in Mexico, dating back to 2007. The lawsuits-brought in the Mexican Federal Court of Labor Law, the Mexican Treasury Department, and the Procuraduria General de La Republica-were filed by Ángel Alvarado-Agüero, a former 16-year employee and marketing executive with Coca-Cola in Mexico. The series of lawsuits contend that Coca-Cola and an affiliate conspired over the past 24 years to cheat 1) Mexican workers, including Mr. Alvarado-Agüero, out of agreed-upon and legally mandated compensation; and 2) the Mexican government out of lawful tax revenue through a scheme of outsourcing and tax evasion. [SUPPORTING DOCUMENT "Original 2007 Lawsuit WILL BE MAILED SEPARATELY.]

Coca-Cola was made aware of these lawsuits upon each filing (in June 2007, December 2008 and October 2010), as well as via a personal letter to Mr. Kent in December 2009 that outlined all the claims in the lawsuits and the scope of the tax evasion issues. At that time, the Coca-Cola tax situation was even being discussed in the Mexican Congress. [SUPPORTING DOCUMENT "2009 Letter to Mr. Kent" SUPPLIED.]

Despite all this, Coca-Cola and Mr. Kent continue to purposefully deceive the investing public as to the potential financial and litigation damage, estimated in the billions of dollars, the company may face in Mexico, which is Coca-Cola's second-largest market. In previous public statements by its executives and in its publicly filed documents with the SEC, Coca-Cola has refused to inform shareholders of these on-going events, which carry potentially damaging consequences for the company's brand name, legal liability, profits and, of course, stock price.

At the April 27 Annual Meeting, however, Mr. Kent blatantly crossed the line into what I am certain is a securities law violation in accordance to the Securities Exchange Act of 1934, and its Antifraud provision, outlined in Section 10(b), which was codified in SEC Rule 10(b)-5. The Rule reads, in part:

"It shall be unlawful for any person, directly or indirectly... [t]o make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading..."

During that meeting, I asked Mr. Kent publicly before the entire Annual Meeting of Shareholders why the company and its executives have refused to acknowledge the situation in Mexico and its potentially damaging consequences for the company, and by extension, its shareholders. Mr. Kent replied that my claim that Coca-Cola was facing any such legal problem in Mexico was "false" and had "no merit". Pushed further, he continued to state that any claims that Coca-Cola faced a lawsuit and government investigation in Mexico were "groundless" and had "no facts to back them up." Mr. Kent's denials were in direct contrast to the public record, both in this country and in Mexico, which includes press accounts, government correspondence and legal documents. [SUPPORTING VIDEO "Ray Rogers addressing Coca-Cola CEO Muhtar Kent at the 2011 Shareholders Meeting" available on YouTube at http://www.youtube.com/watch?v=0O_56XpkqTo.]

It is clear that Mr. Kent has lied to and tried to mislead both shareholders and the investment community, in regards to the company's situation in Mexico. He has also withheld information of potential liabilities that the investment community should be aware of because they could cost the company billions of dollars in fines, restitution and legal damages. As it is, the company is already losing tens of millions of dollars in revenue as well as irreparable harm to its brand value due to boycotts and protests against the company because of its illegal and immoral activity in many parts of the world.

More urgently, the latest of Mr. Alvarado-Agüero's lawsuits, filed last October, has sparked an investigation by Mexico's Fiscal Crimes division of the Federal Treasury Investigation Department, and the story has been picked up by the Mexican press. It is only a matter of time before it breaks in the U.S. press with likely very dire consequences for the company and its shareholders.

I would strongly encourage the SEC to investigate Mr. Kent's comments and compel The Coca-Cola Company and Mr. Kent to fully comply with this nation's securities laws, especially those laws requiring a company's complete and truthful disclosure of all material matters.

Ray Rogers
Director
Corporate Campaign, Inc.
Campaign to Stop Killer Coke