Hitachi paying $19M to resolve 'improper' payments charges
Sep. 28, 2015
WASHINGTON (AP) — Hitachi Ltd. has agreed to pay $19 million to resolve U.S. regulators' allegations that it inaccurately reported improper payments it made to South Africa's ruling party to win contracts to build power plants.
The Securities and Exchange Commission announced the settlement Monday with the Japanese conglomerate.
The SEC says Hitachi paid $6 million to a front company for the African National Congress, South Africa's ruling party. Of that, $1 million in fees paid in a 2008 secret arrangement were masked as consulting fees in Hitachi's books, the agency said. Hitachi won two contracts to build power plants.
Tokyo-based Hitachi neither admitted nor denied wrongdoing in the settlement, which also imposed a permanent injunction against future violations of the Foreign Corrupt Practices Act.
Hitachi, whose businesses include power systems, health care, defense and energy, has a number of subsidiaries in the U.S.
It was Hitachi's "lax" financial controls that enabled its South African subsidiary to make the improper payments and then disguise them in its books, SEC Enforcement Director Andrew Ceresney said in a statement.
Hitachi sold a 25 percent stake in the South African subsidiary to the ANC front company, Chancellor House Holdings, according to the SEC. That enabled Chancellor and the ANC to share in the profits from any power station contracts obtained by Hitachi, the agency said.
Representatives for Hitachi didn't immediately return a request for comment.