Kentucky-based General Cable Corporation said it added $4 million to its reserve and has now set aside $28 million that’s “probable to be disgorged” to the SEC in a possible settlement of FCPA offenses.
In a securities filing last week, the company said the $28 million is the amount of profit it made from bribe-tainted sales in Angola, Thailand, India, China, and Egypt.
General Cable said its disgorgement may rise to $33 million because of other transactions that were possibly tainted by bribery.
(Our list of the top ten FCPA disgorgements is here.)
In September 2014, General Cable said it was investigating possible bribes in Angola, Thailand, and India that were paid over at least ten years starting in 2002. The investigation later expanded to China and Egypt.
The current $28 million accrual is for disgorgement only and doesn’t include “the amount of any possible fines, civil or criminal penalties or other relief, any or all of which could be substantial,” General Cable said.
The manufacturer of copper and fiber-optic cables said its internal investigation focused on payments and gifts made directly and through intermediaries “to employees of public utility companies and/or other officials of state owned entities.”
The payments raise concerns under the FCPA and possibly other laws, the company said.
It self disclosed the findings of its investigation to the DOJ and SEC.
General Cable Corporation trades on the NYSE under the symbol BGC. The company reported revenue of about $4.2 billion last year.
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Here’s the full FCPA disclosure from the Form 8-K (pdf) filed by General Cable Corporation with the SEC on February 10, 2016:
As previously disclosed, we have been reviewing, with the assistance of external counsel, our use and payment of agents in connection with, and certain other transactions involving, our operations in Angola, Thailand, India, China and Egypt (the “Subject Countries”). Our review has focused upon payments and gifts made, offered, contemplated or promised by certain employees in one or more of the Subject Countries, directly and indirectly, and at various times, to employees of public utility companies and/or other officials of state owned entities that raise concerns under the Foreign Corrupt Practices Act (“FCPA”) and possibly under the laws of other jurisdictions.
We have substantially completed our internal review in the Subject Countries and, based on our findings, we have increased our outstanding FCPA-related accrual of $24 million by an incremental $4 million, which represents the estimated profit derived from these subject transactions that we believe is probable to be disgorged.
We have also identified certain other transactions that may raise concerns under the FCPA for which it is at least reasonably possible we may be required to disgorge estimated profits derived therefrom in an incremental aggregate amount up to $33 million.
The amounts accrued and the additional range of reasonably possible loss solely reflect profits that may be disgorged based on our investigation in the Subject Countries, and do not include, and we are not able to reasonably estimate, the amount of any possible fines, civil or criminal penalties or other relief, any or all of which could be substantial. The SEC and DOJ inquiries into these matters remain ongoing, and we continue to cooperate with the DOJ and the SEC with respect to these matters.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.