As highlighted here, earlier this year a “short seller” alleged that Ormat Technologies (a Nevada-based geothermal power company with shares traded on the New York Stock Exchange that owns and operates power plants in Kenya, Guadalupe, Guatemala, Honduras and the United States) was “engaged in what we believe to be widespread and systematic acts of international corruption.”
In its most recent quarterly filing, Ormat stated:
“The Company’s board of directors [has] established a Special Committee of independent directors to investigate, among other things, certain claims made in a report published by a short seller regarding the Company’s compliance with anti-corruption laws. The Special Committee is working with outside legal counsel to investigate the claims made. All members of the Special Committee are “independent” in accordance with the Company’s Corporate Governance Guidelines, the NYSE listing standards and SEC rules applicable to board of directors in general. The Company is also providing information as requested by the SEC and DOJ related to the claims.”
As highlighted in this prior post, in 2017 BRF, a Brazilian company with ADRs traded on the NYSE, disclosed that law enforcement in Brazil filed charges against two employees alleging misconduct relating to improper offers and/or promises to government inspectors. In the disclosure, BRF further stated:
“BRF has communicated with, and has received requests for information from certain regulators and governmental entities, including the U.S. Securities and Exchange Commission and U.S. Department of Justice in relation to this matter. BRF is cooperating with these inquiries.”
The company recently disclosed:
“Pursuant to its previous announcements to the market, whereby it indicated that it has been collaborating with Brazilian and foreign authorities to clarify the facts raised under the Carne Fraca and the Trapaça Operations, that, on May 5, 2021, the United States Department of Justice (“DOJ”) issued a letter to the Company stating that it has closed its investigation against BRF, based on information to date. No sanctions or penalties were imposed against the Company.
The Company reinforces its commitment to collaborate with the authorities and understands that this cooperation process streghtens and consolidates the changes and improvements that it has implemented in its internal processes and controls, in order to guarantee the highest safety, integrity and quality standards.”
As highlighted in this prior post, last Fall Reynolds Group Holdings Limited (a New Zealand based packaging company that is to be converted to a Delaware corporation and renamed Pactiv Evergreen Inc.) announced in connection with a U.S. initial public offering:
“In August 2020, we identified practices in our Evergreen Packaging Shanghai business (“EPS”), which is part of our Beverage Merchandising segment, that involve acts potentially in violation of the FCPA. While our investigation into these practices (which is being conducted by external counsel, accountants, and other advisors) is not complete, we believe we have identified the occasional giving of gift cards representing relatively minor monetary values to government regulators in the People’s Republic of China (“PRC”), and/or employees of one or more state-owned enterprises in the PRC, over the course of several years. In addition, it is possible that EPS potentially violated the FCPA by engaging external consultants to interact with government regulators in the PRC to avoid potential adverse action by those regulators. The amounts involved in each scenario are immaterial, individually and in the aggregate, and we have initiated procedures to remediate such practices, including discontinuing the giving of gift cards and the engagement of any such consultants. We have also voluntarily self-reported these matters to the U.S. Department of Justice and U.S. Securities and Exchange Commission. We intend to fully cooperate with these U.S. government agencies, with the assistance of legal counsel. While we are not aware of any other acts at EPS which could be a violation of the FCPA or other similar laws, our investigation is ongoing and there can be no assurance that other violations have not been made. We are unable at this time to predict when our or the government agencies’ review of these matters will be completed or what regulatory or other consequences may result from these matters.”
The prior post noted that the disclosure was interesting because as a non-issuer foreign company, Reynolds Group Holdings Limited is only subject to the FCPA’s anti-bribery provisions to the extent “while in the territory of the United States” the “mails or any means or instrumentality of interstate commerce” was corruptly used in connection with an improper payment scheme.
Recently, the company disclosed:
“As disclosed in our risk factors in our Annual Report on Form 10-K for the year ended December 31, 2020, in August 2020 we identified practices in our Evergreen Packaging Shanghai business, which is part of our Beverage Merchandising segment, which involve acts potentially in violation of the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”). In September 2020 we made a voluntary self-disclosure to the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) about these items and our investigation being conducted by external counsel, accountants and other advisors. Our investigation identified the occasional giving of gift cards representing relatively minor monetary values to government regulators and employees of state-owned enterprise customers in the People’s Republic of China (“PRC”), over the course of several years. The amounts involved were immaterial, individually and in the aggregate, and these appear to have been provided at the times of PRC holidays for generalized goodwill purposes only. We have initiated procedures to remediate such practices, including discontinuing the giving of gift cards. We also identified certain other gift, travel and entertainment practices that do not comply with company policy and expectations. These findings provided an opportunity for targeted, enhanced controls and additional training in these areas. We presented our investigation findings to the DOJ and SEC in February 2021. In response to and based on our investigation findings, the DOJ has decided to close its file on this matter without any action against the Company. We are still waiting on a decision from the SEC. We intend to fully cooperate with the SEC, with the assistance of legal counsel, to conclude this matter. We are unable at this time to predict when the review of this matter by the SEC will be completed or what regulatory or other consequences may result.”
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