Image courtesy of Panasonic Avionics CorporationPanasonic Corporation confirmed Thursday that a subsidiary that develops inflight entertainment and communications systems is under investigation for possible FCPA and securities laws violations.
Osaka, Japan-based Panasonic said in a release it is cooperating with the investigation and “has recently engaged in discussions with the DOJ and SEC with a view towards resolving the matter.”
Panasonic Avionics Corporation is based in Lake Forest, California and has about 4,500 employees. It supplies seat-back entertainment systems for airline passengers and communications systems for planes.
In March 2013, Chris Matthews and Joe Palazzolo of the Wall Street Journal first reported the FCPA investigation. They said the legal department for Panasonic Avionics Corporation had “instructed certain executives and employees to preserve documents that may be relevant to the U.S. government’s investigation.”
A January 20 retention notice reviewed by the Wall Street Journal told recipients to hold on to documents “concerning any benefits or gifts provided, or the payment of anything of value, by Panasonic or PAC to any airline employee or government officials.”
The WSJ said another notice dated March 25 referred to a subpoena from government investigators that “sought communications between Panasonic Avionics and a number of its consultants and middlemen, as well as documents related to payments to those third parties.”
The notices referred to the FCPA and went to dozens of executives and employees based in Asia, Europe, and the Middle East, the report said.
Panasonic didn’t comment on the WSJ report and hadn’t publicly disclosed or confirmed the FCPA investigation until Thursday.
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Here’s Thursday’s full release (pdf):
Osaka, Japan, February 2, 2017 —Panasonic Corporation ([TSE:6752] “Panasonic”) today disclosed that the business operations of its U.S. subsidiary Panasonic Avionics Corporation are the subject of an investigation by the United States Department of Justice (DOJ) and the United States Securities and Exchange Commission (SEC) under the Foreign Corrupt Practices Act and other securities related laws.
Panasonic has been cooperating with the authorities, and has recently engaged in discussions with the DOJ and SEC with a view towards resolving the matter.
Currently it is not possible to make a reasonable estimate of the specific impact of this issue on Panasonic’s consolidated financial results. Further information requiring disclosure will be provided at the appropriate time.
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Richard L. Cassin is the publisher and editor of the FCPA Blog.
1 Comment
This is interesting and disappointing as Panasonic has a creed and pledges put in place by the founder Konosuke Matsushita, in 1929. It lays great emphasis on the role Panasonic plays within society. A wider view is taken than just the financial bottom line.
The attitudes and behaviour of its employees are embodied in the company creed and seven basic business principles:
i. contribution to society
ii. fairness and honesty
iii. cooperation and team spirit
iv. untiring effort for improvement
v. courtesy and humility
vi. adaptability
vii. gratitude.
These principles aim to guide the employee in the direction of what the company sees as acceptable business behaviour. They form part of the behavioural competencies that employees are assessed upon as they progress through their career and are embodied within the annual performance appraisal.
I understand that the credo and pledges were very much part of the culture a few years ago, One would hope that the creed and pledges would prevent wrong doing and it will interesting to find out more about what, if anything, went wrong.
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