Park-Ohio Industries Inc. said on Thursday that a third-party payment on its behalf to tax authorities may have violated the Foreign Corrupt Practices Act.
The subsidiary of Park-Ohio Holdings Corp. said in its latest quarterly filing with the Securities and Exchange Commission that it received a subpoena from the SEC in August. It said the DOJ was also conducting a criminal investigation of the third party.
Cleveland-based Park-Ohio Industries is a diversified manufacturer with facilities in Canada, Mexico, the United Kingdom, Belgium, Germany, Poland, China, and Japan.
The third party acting for Park-Ohio wasn’t named. The filing said the third party paid a foreign tax official on behalf of Park-Ohio in November 2007 and the payment “implicates” the FCPA.
The filing didn’t say what country was involved or how much money was paid.
The company said its board of directors formed a special committee to review the transactions with the third party.
Parent company Park-Ohio Holdings Corporation operates in 16 countries with over 5,000 employees. Revenue in 2012 was about $1.1 billion. Its shares trade on the NYSE under the trading symbol PKOH.
The full FCPA disclosure in Park-Ohio Industries’ Form 10-Q filed November 14, 2013 said:
In August 2013, the Company received a subpoena from the staff of the SEC in connection with the staff’s investigation of a third party. At that time, the Company also learned that the Department of Justice (“DOJ”) is conducting a criminal investigation of the third party. In connection with responding to the staff’s subpoena, the Company disclosed to the staff of the SEC that the third party participated in a payment on behalf of the Company to a foreign tax official that implicates the Foreign Corrupt Practices Act (“FCPA”) in November 2007.
The Board of Directors of the Company has formed a special committee to review the Company’s transactions with the third party and to make any recommendations to the Board of Directors with respect thereto.
The Company intends to cooperate fully with the SEC and the DOJ in connection with their investigations of the third party and with the SEC in light of the Company’s disclosure. The Company is unable to predict the outcome or impact of the special committee’s investigation or the length, scope or results of the SEC’s review or the impact, if any, on its results of operations.
Julie DiMauro is the executive editor of FCPA Blog. She can be reached here.