Here’s what’s been going on in the compliance world this week:
- Airbus settles corruption probe with German prosecutors: Airbus agreed to pay a fine of USD 99 million to settle a German corruption investigation into the 2003 sale of Eurofighter jets to Austria. Prosecutors in Munich said that the probe did not present any concrete evidence that the aircraft manufacturer had resorted to bribery to secure the lucrative contract, yet said that the company’s management had failed in its supervisory duty by allowing employees to make EUR multi-million payments with no clear purpose in connection with the deal. Airbus had fully cooperated on the case and improved its internal controls. Yet, Airbus’ legal woes are far from over as Austrian authorities are still investigating whether bribes were paid to land a EUR two billion contract to sell 18 Eurofighter jets to Vienna. The company is also facing a lawsuit filed by the Austrian government seeking up to EUR 1.1 billion in damages over the Eurofighter purchases. British and French authorities are also investigating Airbus for suspected corruption in its UK-based civil aviation arm.
- Credit Suisse investigated for potential FCPA violations: The DOJ and SEC are conducting an FCPA investigation into the hiring practices of Banking giant Credit Suisse Group AG in the Asia Pacific region and whether the bank had hired referrals from government agencies and other state-owned entities in return for investment banking business and/or regulatory approvals. The bank is cooperating with the agencies on the case. Back in 2016, JPMorgan Chase paid USD 264 million in penalties to settle a similar case. It was found that the bank had awarded jobs to relatives and friends of Chinese government officials to secure banking deals. Other banks that have disclosed similar practices include BKY Mellon, Qualcomm Inc., Citigroup Inc., Barclays PLC, Deutsche Bank, HSBC Holdings plc, and Goldman Sachs Group.
- Lotte Group Chairman receives jail sentence: The business tycoon Lotte Group Chairman Shin Dong-bin was handed down a 30-months jail sentence and fined KRW 7 billion after a Seoul court convicted him of bribery, thus becoming the second head of a top conglomerate, after the de-facto head of Samsung Electronics Co., to be imprisoned for his role in the corruption scandal that brought down South Korean President Park. The charges stem from Lotte’s decision to give the equivalent of USD 6.5 million to a confidante of Park in return for a license to operate duty-free stores. Shin can still appeal the ruling with the Seoul High Court.
- DOJ and SEC decline to prosecute Core Laboratories: The Department of Justice and the Securities and Exchange Commission have declined to bring any enforcement action and thereby closed investigations into Amsterdam-based Core Laboratories’ dealings with Unaoil as reported by the company itslef in a securities filing. No enforcement action will be brought against the company. A report released in March 2016 revealed that Unaoil had allegedly bribed government officials on behalf of about a dozen companies in the oil and gas sector, inlcuding Core Labs. Unaoil has denied the bribery allegations. The UK Serious Fraud Office launched a corruption probe into Unaoil in 2016, and has charged two men so far.
- Confident of former South Korean president sentenced to prison: A Seoul Central District Court sentenced Choi Soon-sil, the friend and confident of former South Korean president, Park Geun-hye, to 20 years’ imprisonment and fined USD 16.6 million over her role in the corruption case that led to the impeachment of Park. Choi was found guilty of abusing her friendship with Park to meddle in state affairs for personal gain and convicted of bribing several of the country’s conglomerates including Samsung. Samsung Group heir Lee Jae-yong was also sentenced in connection with the case, yet an appeal court freed him earlier this month. Park was also indicted on multiple charges, including bribery. A verdict in her case is expected in the next couple of months.
- Greek prosecutors launch corruption investigation into Novartis: Greek authorities have opened an investigation into pharmaceutical giant Novartis AG for allegedly bribing officials and doctors to fix drug prices and boost Novartis’ sales to public hospitals between 2006 and 2015. In a report sent to the Greek parliament, prosecutors claim that the illegal arrangement cost the Greek state EUR billions. Novartis has been cooperating with authorities and is also conducting an internal investigation. No indictments have been issued against the company nor any of its associates so far. Ten officials, including two former prime ministers, Antonis Samaras and Panagiotis Pikrammenos, and the European Union’s current migration commissioner, Dimitris Avramopoulos have been linked to the scheme. The parliament will decide whether the politicians’ immunity should be lifted in order for them to face prosecution. All the officials deny any wrongdoing.
- Chinese politician to be tried on corruption charges: Sun Zhengcai, once a powerful politician in China and potential contender for top leadership, will stand trial on bribery charges. Sun was put under investigation and expelled from the Communist party after being abruptly removed from his position as party chief of the southwestern metropolis of Chongqing last July. According to state media, Sun is charged with abusing his position during his decades-long political career to obtain undue benefits in the form of money and items in large amounts. The trial of Sun is part of President Xi Jinping’s anti-corruption crackdown, which has brought down several of the country’s top officials.
- Juniper received DOJ declination letter: The Department of Justice has closed its FCPA investigation into California-based Juniper Networks, Inc. and the agency will not bring any enforcement action against the company. The SEC’s investigation into possible FCPA violations is, however, still pending. Juniper makes networking equipment and generates most of its revenues from sales outside the U.S. The company said that it is cooperating with authorities on the case. Information on where the potential violations have occurred and who may be involved were not disclosed. Yet, the company’s biggest customer at the time when the FCPA investigation was launched was China Mobile Ltd, whose former vice chairman, Zhang Chunjiang, received a suspended death sentence in 2011 for taking more than USD 1.2 million in bribes. Juniper was not named in the case involving Zhang.