Panasonic will pay $280m in fines to settle charges over bribes

New York — Panasonic will pay $280m in fines to settle charges over bribes to an employee at a government-owned airline to win business for its aircraft electronics unit, US authorities said on Monday.

Panasonic Avionics Corporation (PAC), a subsidiary of the Japanese electronics giant, had paid $875,000 to install a government official who served as a "consultant" while the government airline was negotiating business with the company, the US justice department said.

The payments were made between 2008 and 2014 at a time when Panasonic Avionics was negotiating two agreements with the airline worth more than $700m, according to the Securities and Exchange Commission (SEC), which called the payments "a bribery scheme". The SEC did not disclose the name of the airline, but said the bribery occurred in the Middle East.

The government official had "provided little or no services" in exchange for the money, which were routed through an "unrelated third-party vendor to conceal the payments", the SEC said.

However, the official assisted PAC’s efforts to win business, providing confidential information and "maintaining the relationship with the government airline".

The justice department fined Panasonic Avionics $137.4m for charges of the Foreign Corrupt Practices Act and entered into a deferred prosecution agreement with the firm.

The SEC fined parent company Panasonic Corporation. $143m for violating the act and accounting fraud. The SEC also sanctioned Panasonic Avionics for poor internal controls and for not keeping accurate records of payments to consultants and sales agents used to solicit business throughout the Middle East and Africa.

"Investors rightfully expect that the companies they invest in will not engage in bribery or fraud," said Antonia Chion, associate director of the SEC’s enforcement division. "Issuers must implement effective controls for the selection and engagement of consultants and agents to ensure compliance with antibribery statutes."

Panasonic Avionics said it had hired a new CE, chief compliance officer and chief financial officer and had enhanced corporate controls over third-party agents and consultants.

"We have taken extensive steps over the past few years to strengthen our compliance programmes and internal controls," Panasonic Avionics CEO Hideo Nakano said.

AFP