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Avantor

Avantor is a chemicals and materials company headquartered in Pennsylvania. Recently, various Republican Senators sent this letter to DOJ and SEC leadership requesting an investigation into the company “for its apparent longstanding contribution to the opioid epidemic that killed 50,000 of our fellow citizens in 2019 ….”.

Although the letter does not allege any bribery, it does reference the FCPA’s books and records and internal controls provisions and states in pertinent part:

“Avantor’s conduct also compels an investigation under the FCPA. Under federal law, Avantor, as an issuer of stock, is required to “make and keep accurate books, records, and accounts that, in reasonable detail, accurately and fairly reflect the issuer’s transactions and disposition of assets.” Additionally, Avantor is required to devise and maintain reasonable internal accounting controls sufficient to provide reasonable assurances that transactions are compliant with the FCPA. In practice, and according to the FCPA Resource Guide produced by the DOJ and SEC in July of 2020, that means the following:

“Fundamentally, the design of a company’s internal controls must take into account the operation realities and risks attendant to the company’s businesses, such as: the nature of its products or services; how the products or services get to market; the nature of its work force; the degree of regulation; the extent of its government interaction; and the degree to which it has operations in countries with a high risk of corruption. Just as a company’s internal accounting controls are tailored to its operations, its compliance program needs to be tailored to the risks specific to its operations. Businesses whose operations expose them to a high risk of corruption will necessarily devise and employ different compliance programs than businesses that have a lesser exposure to corruption.”

It is not clear what, if anything, Avantor has done to address the “operational realities and risks attendant” with producing acetic anhydride, a key ingredient to make heroin, in the cartels’ backyard since acetic anhydride appears to have been easily diverted to the Mexican drug cartels for a number of years. This circumstance and the various alarm bells being sounded by the INCB and the media covering the Mexican drug busts should cause Avantor to take further precautionary measures to tighten any and all controls on products that contribute to the opioid epidemic. Additionally, in its recent annual SEC filing, Avantor did not disclose any “outstanding litigation” that it believes would result in material losses or any “unasserted matters that are reasonably possible to result in a material loss.” That Avantor did not feel the need to warn the American public in its SEC disclosures that a dangerous precursor chemical it produced in Mexico had helped fuel the opioid epidemic in the United States is alarming, and certainly warrants further investigation by the DOJ and the SEC.”

Grab Holdings

Grab Holdings, which describes itself as Southeast Asia’s leading superapp, recently announced that “it intends to go public in the U.S. in partnership with Altimeter Growth Corp. (Nasdaq: “AGC”) in what is expected to be the largest-ever U.S. equity offering by a Southeast Asian company. The combined company expects its securities will be traded on NASDAQ under the symbol “GRAB” in the coming months.”

Grab also recently disclosed:

“Grab is subject to various anti-corruption laws. Grab has substantially completed an internal investigation into potential violations of certain anti-corruption laws related to its operations in one of the countries in which it operates and has voluntarily self-reported the potential violations to the U.S. Department of Justice. Although Grab does not believe the issues that were the subject of its internal investigation would result in material financial penalties, there can be no assurance that failure to comply with any such laws would not have a material adverse effect on it.”

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