Hitachi Settles With SEC Over South Africa Contracts
September 28 2015 - 2:30PM
Dow Jones News
Hitachi Ltd. agreed to pay $19 million to settle U.S. Securities
and Exchange Commission charges that the Japanese conglomerate
violated U.S. antibribery law through allegedly improper payments
tied to South African government contracts to build two
power-generation plants.
Hitachi agreed to the settlement without admitting or denying
the SEC's allegations—which claimed Hitachi had violated the U.S.
Foreign Corrupt Practices Act by inaccurately recording improper
payments made to a front company for South Africa's ruling
political party related to the contracts. A Hitachi spokesman
couldn't immediately be reached to comment.
Tokyo-based Hitachi in late 2005 sold a 25% stake in its South
African subsidiary to Chancellor House Holdings Ltd., a front for
the African National Congress, in a deal that allowed for the
company and South Africa's ruling party to share in profits from
power-station contracts secured by Hitachi, according the SEC.
Hitachi ultimately won contracts for the two power plants and
apparently paid Chancellor House roughly $5 million in dividends
based on profits tied to the contracts, according to the SEC.
The SEC also alleged that in 2008, Hitachi paid an additional $1
million in "success fees" to Chancellor House, which were
improperly booked as consulting fees.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 28, 2015 14:15 ET (18:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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