November 7, 2017 - the U.S. Department of Justice (DOJ) notified Kinross that it closed its investigation, declining to pursue further the matter against the Company and noting the Company’s full cooperation during the inquiry.
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Extractive Industries/Mining/Oil & Gas
Toronto, Canada
Nationality of Foreign Officials: Ghana, Mauritania
Summary of Allegations:
From 2010 to at least 2014, Kinross allegedly knowingly failed to implement and maintain sufficient internal accounting controls in connection with its gold mine operations in Mauritania (via its wholly owned indirect subsidiary Tasiast Mauritanie Limited S.A.) and Ghana (via its majority owned indirect subsidiary Chirano Gold Mines Ltd.).
As a result, the companies paid vendors and consultants (often in connection with government interactions, and sometimes in the form of petty cash), without reasonable assurance that the funds would only be used for legitimate corporate purposes. Kinross also failed to accurately and fairly describe such payments in its books and records. Additionally, Kinross is alleged to have failed to maintain proper internal accounting controls around its contract bidding and awards process.
Kinross acquired both of the subsidiaries from Red Black Mining in 2010, and knew at the time of purchase that the companies lacked anti-corruption compliance programs and internal accounting controls. Despite multiple internal audit investigations and flags about the deficiencies, Kinross failed to take action to implement adequate controls for at least 3 years. Even after adopting controls, Kinross failed to maintain them.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Agencies: Internal Investigation
Results:
Year Resolved: 2018
Compliance Monitor:
Ongoing: No
Details:
2013 - Kinross announced that company took immediate actions in accordance with the company's Whistleblower Policy and external counsel, Sullivan & Cromwell LLP, was immediately retained in August 2013 to conduct an internal investigation.
Agencies: United States: Department of Justice
Results: Declination
Year Resolved: 2017
Compliance Monitor:
Ongoing: No
Details:
December 2014 - Kinross received subpoena from the DOJ
Agencies: United States: Securities and Exchange Commission
Results: Administrative Order, Cease-and-Desist Order, Civil Penalty
Year Resolved: 2018
Compliance Monitor: SEC
Ongoing: No
Details:
In March and December 2014, and July 2015, Kinross received subpoenas from the U.S. Securities and Exchanges Commission ("SEC") seeking information and documents on allegations of improper payments made to government official and certain internal control deficiencies at the company's mining operations in Mauritania and Ghana.
26 March 2018 - The SEC issued an administrative order with Kinross's consent to conclude its investigation into the company’s alleged FCPA violations. Kinross neither admitted nor denied the SEC's findings.
The SEC ordered Kinross to cease and desist from committing any future violations of Sections 13(b)(2)(A) & (B) of the Exchange Act and to pay a USD 950,000 civil penalty. Kinross must also report its remediation and implementation of compliance measures to the SEC during a one-year term.
Discovery Method: Whistleblower
Details:
Country: