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Monster Beverage sued for having no Black directors


Monster Beverage Corp. has become the latest company to be sued for not having any Black directors on its board.

Corona, California-based Monster Beverage is one of the few publicly traded companies to not have a single African American director, according to the derivative shareholder complaint filed in U.S. District Court in Santa Ana, California, on Friday. The lawsuit, Frank Falta, derivatively on behalf of Monster Beverage Corp. v. Rodney Cyril Sacks et al. and Monster Beverage Corp., was first reported on by the D&O Diary.

Monster Beverage joins several other companies that have been sued on similar grounds, including Danaher Corp., The Gap Inc., Norton LifeLock Inc., Qualcomm Technologies, Facebook Inc. and Oracle Inc., with more litigation expected.

The complaint states that although the board’s directors “have repeatedly made misrepresentations in the company’s public statements by claiming to have a policy of being committed to diversity and inclusion” in reality the defendants “have repeatedly resisted efforts to increase diversity at the top of the Company.”

The complaint states the company’s two top executives, Mr. Sacks, its chairman and CEO, and Hilton Hiller, vice chairman, chief operating officer, chief financial officer and secretary, are “friends and fellow white billionaires from  South Africa, where apartheid and racial discrimination persisted until the 1990s.”

The company and its directors are charged in the suit with breach of fiduciary duty, aiding and abetting breach of fiduciary duty, abuse of control, unjust enrichment and violations of securities laws.
The suit asks that at least one of Monster’s directors resign before its annual meeting in April 2012 and be replaced by a Black director, among other steps.

A company spokesman could not be reached for comment.