Japan’s electronics and appliance company Panasonic has agreed Monday to pay fines totaling more than $ 280 million to bring to an end charges of corruption in the United States against one of its subsidiaries.
Panasonic Avionics Corp (PAC), which provides internet connection and in-flight entertainment services as well as business navigation systems, was accused of accounting manipulation, according to the regulator of the Stock Exchange, the SEC.
To avoid a lawsuit, the parent company, Panasonic, will pay $ 143 million to the SEC, while PAC will pay a $137 million to the Department of Justice, as part of a Deferred Prosecution Agreement. The latter is a mechanism through which a company recognizes elements that are alleged against it and commits itself to no longer commit similar offenses. In exchange, the authorities will not prosecute the company.
PAC has “offered a lucrative position of consultant to a government official of a public airline” in the Middle East in exchange for the latter’s support on tenders, accuses the SEC in a statement.
The company was in discussion with the airline, whose name is not revealed, for two contracts valued at more than $ 700 million by the time it recruited the official.
PAC “paid about $ 875,000 for a position to do nothing”, castigates the SEC. The Japanese company reportedly used third-party services to make and disguise the payments that took place between 2008 and 2014.
“We are pleased to have resolved these investigations,” said Hideo Nakano, CEO of PAC. “We have taken steps in recent years to strengthen Panasonics Avionics’ internal controls and compliance programs,” he added.
The US authorities have forced the group to recruit an independent controller whose mission will be to ensure that PAC takes all necessary measures to prevent new cases of corruption.
The US investigation also concluded that PAC had inflated its financial results by more than $ 82 million in the quarter ended June 30, 2012.
This accounting manipulation proceeds, according to the regulator, of an agreement with the aforementioned airline to antedate an agreement between the two parties and to mislead the auditors.
The internal control procedures, which could have sounded the alarm, also did not work properly and the account books were also falsified so as not to reveal the bribes paid to officials of airlines by PAC salespeople in the Middle East and Asia, the SEC still laments.
The allegations against Panasonic’s subsidiary fall within the scope of an investigation whose legal basis is the Foreign Corrupt Practices Act (FCPA), a US law on corrupt practices abroad.