Posted on: 03 May 2018 by Alexander Preston
Panasonic Avionics Corporation has agreed to pay a US$137.4 million criminal penalty to resolve charges arising out of a scheme to retain consultants for improper purposes and conceal payments to third-party sales agents, in violation of the accounting provisions of the US Foreign Corrupt Practices Act (FCPA).
As part of a deferred prosecution agreement (DPA), PAC has agreed to continue to cooperate with the department’s investigation, enhance its compliance program, implement rigorous internal controls and retain an independent corporate compliance monitor for at least two years.
In a related proceeding, the US Securities and Exchange Commission (SEC) filed a cease and desist order against Panasonic, whereby the company agreed to pay approximately $143 million in disgorgement to the SEC, including prejudgment interest. Thus, the combined total amount of U.S. criminal and regulatory penalties to be paid by Panasonic and PAC is over $280 million.
“We are pleased to have resolved these investigations; we have taken extensive steps over the past few years to strengthen Panasonic Avionics’ compliance programs and internal controls, and we welcome an independent compliance monitor to assess our progress,” said Hideo Nakano, CEO of Panasonic Avionics.
According to PAC, remedial actions taken include installing a new executive management team, including a new chief executive officer, chief operating officer, chief financial officer, and chief compliance officer; strengthening internal financial controls; developing an enhanced compliance program under the leadership of the new CCO; hiring a global team of compliance, finance and audit experts, and substantially reducing, and enhancing the controls around, the use of third-party agents and consultants
“This is an ongoing effort and the company will continue to strengthen its compliance programs and internal controls,” added Nakano. “With these investigations behind us, we are confident that Panasonic Avionics is well-positioned for long-term success under our new management team.”