Business

Kentucky’s General Cable to pay more than $75 million to settle foreign bribery case

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Linus Unah – Fourth Estate Contributor

Highland Heights, KY, United States (4E) – Kentucky-based wire and cable manufacturer General Cable Corporation will pay more than $75 million to resolve allegations that it violated U.S. law governing foreign bribery, the U.S. Securities and Exchange Commission (SEC) said on Thursday.

The Foreign Corrupt Practices Act ( FCPA ) bans companies from paying bribe to overseas officials to win business. In 2016 alone, about $2.3 billion was collected through FCPA sanctions.

According to the SEC’s orders, General Cable’s overseas subsidiaries made improper payments to foreign government officials for 12 year to obtain or retain business in Angola, Bangladesh, China, Egypt, Indonesia, and Thailand.

General Cable’s weak internal controls also failed to detect improper inventory accounting at its Brazilian subsidiary, the SEC said, causing the company to misstate its financial statements from 2008 to 2012.

“General Cable operated globally without the effective compliance programs and internal controls necessary to proactively address corruption risks and accounting errors,” Stephanie Avakian , acting director of the SEC enforcement unit, said in a statement.

The company agreed to pay back more than $55 million to the SEC and also agreed to pay additional $6.5 million penalty to settle accounting violations.

The wire and cable manufacturer also agreed to pay nearly $20.5 million to settle the Justice Department’s bribery allegations.

General Cable neither admitted nor denied the SEC’s findings.

The SEC also charged Karl J. Zimmer, General Cable’s then-senior vice president responsible for sales in Angola.

Zimmer agreed to pay a $20,000 penalty without admitting or denying the SEC’s findings that he circumvented internal accounting controls and caused the violations.

The SEC said it found no personal misconduct by General Cable’s former CEO Gregory B. Kenny and its former chief financial officer Brian J. Robinson.

Robinson returned $3.7 million and $2.1 million in compensation received from the company during the period when the accounting violations occurred.

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