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Technology / Software / Electronics
Kadoma, Osaka, Japan
Nationality of Foreign Officials: Unspecified
Summary of Allegations:
On 1 April 2013, the Wall Street Journal reported that Panasonic Avionics Corporation ("PAC"), US avionics subsidiary of Panasonic Corporation ("Panasonic"), is under investigation by the US authorities for potential violations of the U.S. Foreign Corrupt Practices Act ("FCPA"). In 2013, PAC allegedly issued two retention notices. On 20 January 2013, the first retention notice was allegedly sent to some executives and employees, allegedly instructing them to not destroy any documents "concerning any benefits or gifts provided, or the payment of anything of value, by Panasonic or PAC to any airline employee or government officials" or any documents "reporting rumors, concerns and/or complaints regarding any alleged acts of bribery of [sic] corruption by Panasonic or PAC employees." On 25 March 2013, the second retention notice was allegedly sent to a number of employees and executives in the Middle East, Europe and Asia, allegedly disclosing that Panasonic received a subpoena that same month regarding communication between PAC and a number of consultants and middlemen, as well as documents related to payments to those third parties.
30 April 2018 - Based on the statements of fact in the DOJ & SEC orders, we know:
Between 2007 and 2016, PAC engaged in a scheme to retain sales consultants for improper purposes other than actual consulting services. For example, PAC offered a lucrative consulting position to a Middle Eastern government official to induce him to assist PAC in obtaining business from a state-owned, Middle Eastern airline. PAC paid the government official consultant approximately USD 875,000 over a six year period to do little to no work. PAC also hid the use of consultants in Asia that did not meet internal standards by rehiring them as sub-agents of other Agents who had passed PAC’s due diligence checks. PAC did not accurately reflect these improper payments in its books and records (which were consolidated into Panasonic Corp’s); and Panasonic failed to maintain sufficient internal accounting controls to detect and prevent such improper payments.
Approximate Alleged Payments to Foreign Officials: millions
Business Advantage Allegedly Obtained: contract advantages; influence over government officials
Agencies: United States: Department of Justice
Results: Compliance Monitor, Criminal Fine, Deferred Prosecution Agreement
Year Resolved: 2018
Compliance Monitor: Independent monitor for at least 2 years
Ongoing: No
Details:
The Wall Street Journal reported on 1 April 2013 that Panasonic received a subpoena in March 2013 regarding communications between PAC and a number of consultants and middlemen, as well as documents related to payments to those third parties. The article further reported that the two retention notices sent by PAC do not identify which US agency has initiated the investigation or if both the U.S. Department of Justice ("DOJ") and U.S. Securities & Exchange Commission ("SEC") are investigating the matter.
On 2 February 2017, Panasonic, in a press release, disclosed that the business operations of PAC are investigation by the DOJ and the SEC regarding potential FCPA violations. Panasonic is cooperating with the investigation and has recently engaged in discussions with the authorities to resolve the matter.
27 April 2018 - The DOJ entered into a three-year Deferred Prosecution Agreement with PAC requiring payment of a discounted monetary penalty in the amount of USD 137.4 million and an independent monitor for at least two years.
14 March 2022 - A federal judge dismissed charges against Panasonic after prosecutors said the company fully complied with its obligations under the DPA
Agencies: United States: Securities and Exchange Commission
Results: Cease-and-Desist Order, Disgorgement
Year Resolved: 2018
Compliance Monitor:
Ongoing: No
Details:
The Wall Street Journal reported on 1 April 2013 that Panasonic received a subpoena in March 2013 regarding communications between PAC and a number of consultants and middlemen, as well as documents related to payments to those third parties. The article further reported that the two retention notices sent by PAC do not identify which US agency has initiated the investigation or if both the U.S. Department of Justice ("DOJ") and U.S. Securities & Exchange Commission ("SEC") are investigating the matter.
On 2 February 2017, Panasonic, in a press release, disclosed that the business operations of PAC are investigation by the DOJ and the SEC regarding potential FCPA violations. Panasonic is cooperating with the investigation and has recently engaged in discussions with the authorities to resolve the matter.
30 April 2018 - the SEC issued an administrative order to conclude its investigation into Panasonic Corp’s improper payments to various sales agents and consultants. The SEC ordered Panasonic Corp. to cease and desist from committing any future violations of Sections 10(b), 13(a), 13(b)(2)(A) & (B), and 30A of the Exchange Act and Rules 10b-5, 12b-20, and 13a-16 thereunder; and to pay a total of approximately USD 143.2 million (disgorgement of USD 126.9 million and prejudgment interest of USD 16.3 million).