Embraer to pay $205m after US-Brazil bribery probe
Plane maker settles claims it paid millions of dollars to secure government contracts
Brazil’s Embraer, the world's third-largest commercial aircraft maker, has agreed to pay $205m to settle a six-year bribery investigation over allegations it paid millions of dollars to secure government contracts on three continents.
US authorities said on Monday Embraer made almost $84m in profits thanks to bribes its US-based subsidiary paid, through third-party agents, to government officials in the Dominican Republic, Saudi Arabia and Mozambique.
It was also accused of engaging in an accounting scheme in India involving the sale of military aircraft for its air force.
According to a press release from US authorities, Embraer will pay a $107m penalty to the US Department of Justice and turn over $98m in disgorgement and interest to the securities regulators at the US Securities and Exchange Commission.
It will also pay $20m to Brazilian authorities, which will be offset against its payment to the SEC, according to that agency. Embraer has additionally consented to an independent monitor to ensure it complies with the terms of the settlement.
The settlement “will hold accountable those who treat corruption as a mere cost of doing business”, said US assistant attorney-general Leslie Caldwell. “Between US, Brazilian and Saudi authorities, bribe payers and bribe takers alike have been brought to justice for their wrongdoing.”
Embraer said in a press release that it “deeply regrets” the conduct of its employees and agents that has emerged during investigation.
It announced in July it was setting aside $200m in connection with the probe, which started in 2010 with inquiries from American authorities about potential issues raised by certain international commercial transactions.
Shares in the São Paulo-based company closed down 0.64 per cent to R$15.56.
“The company acknowledges responsibility for the conduct of its employees and agents according to the facts ascertained in the investigation,” Embraer said.
Analysts broadly welcomed the settlement deal, which was in line with expectations.
“We believe that Embraer has strengthened its corporate governance and internal controls,” said credit rating agency Standard & Poor’s, highlighting the financial strength of the aircraft maker at a time when many Brazilian companies are struggling amid the country's deep recession.
“[Embraer] had already set aside $200m in anticipation of a potential deal, which did not change our evaluation of its exceptional liquidity and low leverage,” the credit rating agency said in a statement.
Brazilian and US authorities have heralded the investigation as a model for cross-border co-operation as the Latin American country battles to change an entrenched culture of corruption.
Last week, Brazilian police arrested Eduardo Cunha, the former speaker of the lower house and one of the country’s most influential politicians, over the sprawling corruption scandal at state-oil company Petrobras.
No comments:
Post a Comment