by: John Kehoe
The American food processing giant Archer Daniels Midland, which had its proposed takeover of GrainCorp rejected by Treasurer Joe Hockey, has been charged by the US corporate regulator for paying $US21 million ($23.5 million) in bribes to corrupt government officials in Ukraine.
A US Securities and Exchange Commission investigation found that ADM subsidiaries made the facilitation payments to speed up the payment of the delayed tax refunds.
AADM has agreed to pay fines totalling more than $US54 million to the SEC and US Department of Justice to settle the case.
The penalties were announced on the weekend in the US by the SEC and ADM, for the offences that happened between 2002 and 2008.
“ADM’s lacklustre anti bribery controls enabled its subsidiaries to get preferential refund treatment by paying off foreign government officials,” SEC associate director Gerald Hodgkins said.
“Companies with worldwide operations must ensure their compliance is vigilant across the globe and their transactions are recorded truthfully.”
ADM’s subsidiaries in Germany and the Ukraine paid the bribes through intermediaries to secure the timely release of value added tax refunds.
The payments, in breach of the US Foreign Corruption Practices Act, were concealed by recording the transactions as insurance premiums and other business expenses.
The SEC said ADM had insufficient anti-bribery controls and made $US33 million in illegal profits as a result of the bribes.
The revelation comes only a month after Mr Hockey blocked ADM’s $3.4 billion bid for east coast grain handler GrainCorp on “national interest” grounds.
While ADM’s corporate behaviour was not mentioned by Mr Hockey as a reason for the decision, some National MPs and rural Liberals raised concerns about several run ins with regulators that ADM had had over the past decade.
In a statement, ADM chairman and chief executive Patricia Woertz said the firm voluntarily disclosed the matter in 2009 after becoming aware of some questionable transactions by its non US subsidiary.
This article originally appeared on smh
