Panasonic to pay U.S. $280 million over corruption
LAKE FOREST, Calif. - Panasonic will pay about $280 million to resolve federal charges that executives at its in-flight entertainment unit improperly hid payments to consultants overseas in violation of anti-corruption rules, officials announced Monday.
The Japanese electronics giant's parent company will pay $143 million to the Securities and Exchange Commission, while its Southern California subsidiary, Panasonic Avionics, will pay $137 million in penalties to the U.S. Justice Department, federal prosecutors said.
The investigation concerned payments to consultants in Asia and the Middle East, at least one of which did little or no work, authorities said.
Panasonic Avionics was accused of concealing payments to third-party sales agents between 2007 and 2016, in violation of the accounting provisions of the Foreign Corrupt Practices Act.
Those payments were improperly recorded in Panasonic's regulatory filings, officials said.
"When Panasonic Avionics Corporation caused its publicly traded parent company to falsify its books and records, it distorted the information available to legitimate investors," said acting Assistant Attorney General John Cronan.
In one case, Panasonic hired a foreign official as a consultant while the official was simultaneously negotiating a contract between the company and a government-owned airline.
The official was paid $875,000 over six years, despite doing "little work," according to documents.
The case has prompted internal changes at Panasonic, including "appointing a new management team and substantially reducing, and enhancing controls around, the use of third-party agents and consultants," the company said in a statement Monday.
Panasonic Avionics also agreed to engage an independent compliance monitor for a period of two years.
"Panasonic takes these issues very seriously and is committed to increasing compliance awareness throughout the organization and strengthening its oversight of its subsidiaries globally," the statement said.