Coca-Cola agrees to settlement in shareholder lawsuit

PHILADELPHIA (Reuters) - Coca-Cola (KO.N) agreed to pay $137.5 million (69.4 million pounds) to settle a shareholder lawsuit that 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.

Bottlers use the beverage concentrate to make soft drinks.

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.

The investors claimed that Coca-Cola had failed to disclose material facts about its business and these omissions and misrepresentations harmed investors.

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.