Goodyear Tire & Rubber Co. agreed to pay $16.2 million to settle SEC charges that subsidiaries in Kenya and Angola paid bribes to increase tire sales.
The SEC said in an administrative order Tuesday that Goodyear violated the books and records and internal controls provisions of the FCPA by failing to prevent more than $3.2 million in bribes from 2007 and 2011.
The bribes went to employees of state-owned and private companies, the SEC said.
In Kenya, local Goodyear staff paid employees of the Kenya Ports Authority and Nzoia Sugar Co. In Angola, the Goodyear unit paid bribes at the Catoca Diamond Mine and UNICARGAS, the SEC said.
Ohio-based Goodyear will disgorge $14.1 million and pay prejudgment interest of $2.1 million. There’s no other money penalty in the out-of-court settlement.
In a statement emailed to the FCPA Blog Tuesday, Goodyear said it divested its ownership interest in the Kenyan business in 2013 and is in the process of selling the Angolan business.
The SEC ordered Goodyear to report to the agency at least once a year for three years about “the status of its remediation and implementation of compliance measures.”
Goodyear said two years ago the Kenya probe was triggered by an anonymous complaint via the company’s ethics hotline. The investigation in Angola was based on a separate report from an employee there.
The company said Tuesday it “voluntarily disclosed the results of its investigation to the DOJ and SEC and cooperated with those agencies in the review of the allegations.”
Goodyear has disciplined certain employees, the SEC said, “including executives of its Europe, Middle East and Africa region who had oversight responsibility, for failing to ensure adequate FCPA compliance training and controls were in place at the company’s subsidiaries in sub-Saharan Africa.”
The tire maker has also created a new senior position of Vice President of Compliance and Ethics, “which further elevated the compliance function within the company,” the SEC said.
In its statement, Goodyear said it now has “a comprehensive anti-corruption compliance program and continues to improve and enhance its ability to monitor, detect, investigate and address potential issues.”
“The settlement with the SEC fully resolves all outstanding issues related to these investigations,” the company said.
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The SEC’s order as Securities Exchange Act of 1934 Release No. 74356, Accounting and Auditing Enforcement Release No. 3640, and Administrative Proceeding File No. 3-16400 In the Matter of The Goodyear Tire & Rubber Company, all dated February 24, 2015, is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.