Panasonic to pay $280mn to end corruption probe

Bloomberg

Panasonic Corp. will pay about $280 million to resolve US allegations that executives at its in-flight-entertainment unit improperly hid payments to consultants in the Middle East and Asia, some of whom did little or no work for the company.
The Panasonic parent company, in a settlement announced, will pay $143 million in disgorgement to the Securities and Exchange Commission, while Panasonic Avionics Corp. agreed to pay about $137 million in penalties to the Justice Department for violations of the accounting provisions of the Foreign Corrupt Practices Act.
In addition, Panasonic Avionics, based in Lake Forest, Calif., entered into a deferred-prosecution agreement filed on April 30 alongside a criminal information in Washington federal court.
The settlement ranks among the largest corporate FCPA resolutions under the Trump administration.
In September, Telia Company AB agreed to pay penalties of at least $965 million to US and international authorities to resolve a long-running investigation into corrupt payments involving telecom contracts in Uzbekistan.
In December, Keppel Offshore & Marine Ltd. agreed to pay $422 million to end a US bribery probe into illegal payments to officials at Petroleo Brasileiro SA, Brazil’s state-owned oil company, and to the then-governing political party.

‘Distorted’ Records
Unlike Telia and Keppel, the Panasonic settlement with the Justice Department doesn’t allege actual bribing of a foreign official, though the SEC did accuse the company of bribery.
The case is focussed on the payments to supposed consultants, at least one of whom was a former foreign official who did little or no work for the company.
Those payments were then improperly recorded in the company’s regulatory filings, the government said.
“When Panasonic Avionics Corporation caused its publicly traded parent company to falsify its books and records, it distorted the information available to legitimate investors,” acting Assistant Attorney General John Cronan said in a written statement.
US prosecutors accused Panasonic Avionics of engaging in several schemes, running from 2007 to 2016, to falsely record payments to sales agents and a former foreign official as legitimate consulting expenses.
In one scheme, which ran for nearly a decade, Panasonic Avionics hid more than $7 million in payments to sales agents in Asia, some of whom didn’t pass due diligence checks, according to prosecutors.
“We are pleased to have resolved these investigations,” Hideo Nakano, CEO of Panasonic Avionics, said.