Diageo to pay $16m to settle Asian corruption lawsuit filed by US SEC

on 30/07/11 at 7:11 pm

Industry

British spirits major Diageo has consented to pay over $16m to settle the bribery lawsuit filed by US Securities and Exchange Commission (SEC) on charges of potential violations of the US Foreign Corrupt Practices Act (FCPA).

The US SEC alleged that, during 2003-2009, the spirits company’s divisions in India, South Korea and Thailand made payments of more than $2.7m in bribes to government officials and public liquor units of those countries to gain sales and tax benefits in regard to its Johnnie Walker and Windsor scotch whiskeys.

The spirits company paid more than $1.7m in bribes to lots of Indian government officials, responsible for purchasing or authorizing the sale of its beverages in the country, from 2003 to mid-2009, and earned more than $11m in profit.

According to the SEC findings, Diageo paid around $600,000, for the period of 2004 to mid-2008, to secure and maintain a Thai government and political party official’s favor in regard to the pending multi-million dollar tax and customs disputes.

In Korea, the company paid KRW100m (more than $86,000) to a South Korean customs official for playing a key role in the government’s decision to grant it major tax rebates.

Diageo also made lots of payments as gifts to South Korean military officials in order to secure and retain liquor business.

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