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Johnson Controls discloses FCPA probe in China

Johnson Controls, Inc. said in an SEC filing Friday that it self-reported to the DOJ and SEC an investigation into alleged FCPA violations in China.

The company said the possible violations dated back to 2007.

It self reported the investigation in July 2013.

Johnson Controls said sales by its marine business in China, the focus of the investigation, ranged from $20 million to $50 million during the time the violations might have occurred.

The Milwaukee-based company makes and installs automatic temperature-control systems for buildings, industrial facilities, vehicles and boats, among other things.

In 2007, a subsidiary of Johnson Controls — York International Corporation — paid $22 million to the DOJ and SEC to resolve FCPA offenses.

Johnson Controls, which acquired York in 2005, wasn’t charged in the case.

York’s violations happened from 2001 through 2006, federal prosecutors said.

The DOJ and SEC said York paid more than $7.5 million in bribes through subsidiaries and agents to win commercial and government projects around the world, including in China.

Johnson Controls said Friday it is cooperating with the SEC and DOJ and can’t now predict the ultimate outcome of the investigation.

Johnson Controls Inc. trades on the NYSE under the symbol JCI.


Here’s Johnson Controls full FCPA disclosure from its Form 10-K filed with the SEC on May 2, 2014:

In June 2013, the Company self-reported to the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) alleged Foreign Corrupt Practices Act (FCPA) violations related to its Building Efficiency marine business in China dating back to 2007.

These allegations were isolated to the Company’s marine business in China which had annual sales ranging from $20 million to $50 million during this period.

The Company, under the oversight of its Audit Committee and Board of Directors, proactively initiated an investigation into this matter with the assistance of external legal counsel and external forensic accountants.

In connection with this investigation, the Company has made and continues to evaluate certain enhancements to its FCPA compliance program.

The Company continues to fully cooperate with the SEC and the DOJ; however, at this time, the Company is unable to predict the ultimate resolution of this matter with these agencies.


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

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