Anheuser-Busch InBev, the world’s largest beer manufacturer, has agreed to pay $6 million to settle federal charges that the company violated foreign bribery laws in India and “chilled a whistleblower who reported the misconduct.” The company claimed the violations occurred prior to its operating independently in the country and has since trained its Indian employees on necessary compliances, per the The New York Times.
WHY IT MATTERS
These are always complex issues to distill, but these are also some pretty serious allegations—the company ran afoul of federal law, but also financially threatened its own employees to prevent speaking out. Per a news release from the U.S. Securities and Exchange Commission (SEC), which conducted the investigation, here’s how it all unfolded:
“[T]he company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production of Anheuser-Busch InBev products... Despite repeated complaints from employees, Anheuser-Busch InBev had inadequate internal accounting controls to detect and prevent the improper payments, and the company failed to ensure that transactions involving the promoters were recorded properly... The SEC’s order further finds that Anheuser-Busch InBev entered into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about potential [Foreign Corrupt Practices Act, (FCPA)] violations due to a substantial financial penalty that would be imposed for violating strict non-disclosure terms.”
What we have here is one incrimination snowballing into two. Or, to hear Kara Brockmeyer, chief of the SEC enforcement division’s FCPA unit, tell it: “Anheuser-Busch InBev recorded improper payments by its sales promoters in India as legitimate expenses in its financial accounting, and then exacerbated the problem by including language in a separation agreement that chilled an employee from communicating with the SEC.”
As a result, the company must, for the next two years, report its FCPA compliance efforts to the SEC, while also “making reasonable efforts” to inform select former employees that the company does not prohibit them from contacting the SEC with regards to possible law violations.
If this news slipped by you, that may be because the settlement was announced on the same day the mega merger between AB InBev and SABMiller was made official.
SEC Charges Anheuser-Busch InBev With Violating FCPA and Whistleblower Protection Laws [SEC]
AB InBev Pays $6M to Settle India Bribery Charges [The New York Times]