Top Menu

President Obama Visits Allison Transmission

President Obama will be in the Indianapolis area today visiting Allison Transmission. See here. [Update: given the budget talks in Washington, President Obama has postponed his visit to Allison Transmission].

Readers may recall that in November 2010, Allison Transmission was named as a defendant in a “noisy exit” case. See here for the prior post and here for the prior coverage in the Indianapolis Business Journal (“IBJ”).

Stephen Lowe (Allison’s former Managing Director for China, Japan & Korea Operations) alleged in a civil complaint that Allison fired him because he “refused to engage in violations of the FCPA.” Lowe’s complaint implicated both Allison’s Vice President of International Sales and Marketing and Allison’s Commercial Director of Asia Strategy.

As noted here by the IBJ, Lowe’s lawsuit against Allison was quickly settled in January 2010.

I noted, for the IBJ article, that Allison could be dealing with FCPA exposure for years to come given that such employee allegations often result in a company launching an internal investigation and/or for the DOJ to become interested in the allegations and the company’s overall FCPA compliance.

Fast forward to late March when Allison filed a registration statement with the SEC for an initial public offering. See here for the IBJ coverage.

Allison’s registration statement (here) is silent as to FCPA issues aside from a generic template-like statement as to future risk factors.

This suggest a number of possibilities: (1) that Lowe’s complaint lacked merit yet was settled for nuisance value; (2) that Lowe’s complaint had merit, but the DOJ has not yet contacted the company or perhaps never will; or (3) that Lowe’s complaint had merit, the DOJ has contacted the company, but Allison has chosen not to disclose this in its registration statement.

In any event, none of this is likely to come up during Obama’s visit to Allison Transmission today, but Obama’s visit did provide a good opportunity to check up on Allison Transmission.

*****

A good weekend to all.

Still Yet Another Noisy Exit

Perhaps it is a new trend.

Perhaps it is because the media now covers anything and everything FCPA related.

In any event, it is noticeable.

There has been still yet another “noisy exist.”

Including the below example, I count five in the last few months. See here, here and here for the prior posts.

In October 2009, Stephen Lowe was hired by Allison Transmission (“Allison”) as its Managing Director, China, Japan & Korea Operations. [Allison (here) is an Indiana based designer, manufacturer and supplier of automatic transmissions for medium- and heavy-duty commercial vehicles and military vehicles. In 2007 (see here) The Carlyle Group and Onex Corporation acquired Allison Transmission from General Motors Corporation for US$5.575 billion.]

Lowe alleges in this complaint recently filed in Marion County (Indiana) Superior Court that Allison fired him in July 2010 because he “refused to engage in violations of the FCPA.” Lowe’s complaint implicates both Allison’s Vice President of International Sales and Marketing (“Vice President”) and Allison’s Commercial Director of Asia Strategy (“Commercial Director”).

Among other things, Lowe alleges that: (i) he witnessed the Commercial Director deliver a cash filled envelope to Beijing City Bus officials during dinner; (ii) he heard the Commercial Director describe how he purchased silver jewelry for Chinese government officials “in order to please the officials” (iii) the Commercial Director bragged about winning a Beijing City Bus Olympics contract by doing “whatever it took to please the officials” “including giving gifts, money and prostitutes” and (iv) the Commercial Director “deliberately lost” high-stakes card games to “key Beijing City Bus officials.” [Brain teaser of the day – is deliberately losing a high-stakes card game to a “foreign official” providing the official with a “thing of value”?]

According to the complaint, Allison’s Vice President knew, and approved of, certain of the Commercial Director’s conduct. According to the complaint, “a month before Allison fired him” Lowe disclosed his concerns about the Commercial Director and the Vice President to Allison’s Marketing Manager.

Lowe’s complaint, filed by The Employment Law Group law firm, alleges various Indiana state law causes of action including retaliatory discharge, breach of contract, and breach of the implied covenant of good faith and fair dealing.

For additional coverage of Lowe’s complaint, see here from the Indiana Business Journal.

Powered by WordPress. Designed by WooThemes