American Multinational Food Company and British Multinational Confectionery Company Settle FCPA Charges with SEC for $13 Million Related to India Chocolate Factory

Federal Issues Securities FCPA SEC

On January 6, the British company and the American multinational food company, agreed to pay $13 million to settle the SEC’s allegations related to an agent’s interactions with Indian officials regarding a chocolate factory in India. The charges relate to payments made by the British company’s India unit in 2010 to a local agent who provided consultation services and dealt with Indian governmental officials to obtain clearances and licenses to increase production at the British company’s Baddi plant. The SEC alleged, and both companies neither admitted nor denied, that the British company violated the books and records and internal controls provisions of the FCPA.

According to the SEC, the British company failed to perform appropriate due diligence on the agent and to monitor the agent’s actions, creating a risk that payments could be used for improper purposes. While the agent submitted invoices claiming that he prepared various license applications, the SEC claimed that these license applications were actually prepared by the British company’s other employees. The SEC noted in its decision that the American company had completed its own internal investigation that led to the British company ending its relationship with the agent and that the American company both cooperated with the SEC’s investigation and undertook “extensive remedial actions with respect to [the British company].”