Grupo Televisa S.A.B., a major Mexican media company, recently settled a shareholder lawsuit for $95 million, resolving allegations of bribery involving FIFA officials. Filed with the U.S. Securities and Exchange Commission (SEC) on November 23, 2022, the settlement allocates $21.5 million from the company itself and the remainder from its directors’ and officers’ insurance policies. The allegations revolved around bribery to secure broadcasting rights for four World Cup tournaments, a key revenue source for the company. This agreement concludes over four years of litigation initiated in May 2018.
In 2022, Grupo Televisa merged with U.S.-based Univision, creating a $4.8 billion media powerhouse that now dominates Spanish-language television across North America, reaching an audience of 100 million. Besides media holdings, Grupo Televisa also owns Club América, a professional football club in Liga MX. The lawsuit, considered the largest U.S.-based shareholder class action involving a Mexican publicly traded company, highlights significant governance issues within Grupo Televisa, specifically failures in internal financial controls.
Shareholders accused Televisa of orchestrating a bribery scheme with Torneos y Competencias SA, an Argentine marketing company, to gain FIFA’s broadcasting rights. The company allegedly concealed illegal payments and made misleading public statements about its compliance policies and financial controls. Revelations of material weaknesses in its internal controls, disclosed in January 2018, further substantiated the claims. Shareholders argued these actions led to artificially inflated stock prices, causing financial losses when the truth came to light.
This case is one among several recent high-profile ESG (environmental, social, and governance) failures where companies have been implicated in bribery scandals. Comparable cases include Petrobras’ $3 billion settlement in 2018 and Walmart’s $160 million settlement in 2019. Grupo Televisa’s settlement addresses claims against its Chairman Emilio-Fernando Azcárraga Jean III and Board Member Salvi Rafael Folch Viadero, following the court’s rejection of an appeal by the defendants.
The settlement awaits court approval, which is expected after the conclusion of the 2022 FIFA World Cup in Qatar. ISS Securities Class Action Services will continue monitoring developments, keeping stakeholders informed. This case underscores the growing scrutiny of corporate governance and the financial repercussions of ethical lapses, serving as a stark reminder for companies to prioritize robust compliance frameworks.
