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WSJ: DOJ Calling Avon’s Jung

The Wall Street Journal’s Joe Palazzolo, Emily Glazer, and Joann S. Lubin said yesterday that federal prosecutors want to speak to Avon’s former CEO about possible FCPA compliance issues in China.

Andrea Jung said in December she would resign as CEO. Her departure apparently was due to Avon’s financial performance. She hasn’t been linked to the bribery allegations. She still serves as chairman of the beauty products giant.

Avon launched an internal investigation in 2008 linked to the payment of improper promotional expenses. The company has spent more than $250 million on the investigation.

The Wall Street Journal said the ‘specific reason for speaking to Ms. Jung couldn’t be determined, and it is unclear when a meeting might take place. But [the DOJ’s] interest shows their investigation is reaching the highest level of the door-to-door beauty company.’

A shareholder lawsuit filed earlier this year accused Avon of paying a big severance to a former head of internal audit in 2006 to buy his silence about bribes in China.

The DOJ and SEC haven’t commented on their investigations of the company.

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