Panasonic Avionics Corporation today announced that it has entered into an agreement with the U.S. Department of Justice (DOJ) to resolve a charge under the U.S. Foreign Corrupt Practices Act (FCPA).
The company has also entered into a settlement agreement with the U.S. Securities and Exchange Commission related to a previously-disclosed investigation of the FCPA and other securities laws violations at Panasonic Avionics.
The press release says that Panasonic and Panasonic Avionics will pay a combined total of approximately $280.6 million to the U.S. government in connection with these resolutions.
The company has also agreed to engage an independent compliance monitor for a period of two years, after which the company will self-report for one year.
Hideo Nakano, CEO of Panasonic Avionics, said: “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.”
It said 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 Chief Compliance Officer
- Hiring a global team of compliance, finance and audit experts
- 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.”
Headquartered in Lake Forest, California with over 5,000 employees and operations in 80 global locations, Panasonic Avionics Corporation has delivered more than 9,000 IFE systems and 2,000 inflight connectivity solutions to the world’s leading airlines.
“Get Connected” comment: The FCPA investigation cost the heads of a number of its employees, notably Paul Margis, CEO of Panasonic Avionics.
While rumours abounded as to what exactly happened the company’s staff, quite rightly, always remained very tight-lipped about the whole affair.
The BBC reports US regulators alleged that Panasonic Avionics improperly hid payments to consultants in the Middle East and Asia in violation of the accounting provisions of the Foreign Corrupt Practices Act. For more details we suggest you read the BBC feature.