Days before the announced launch of its initial public offering, foodservice packaging company Pactiv Evergreen (currently Reynolds Group Holdings Limited) announced in a regulatory filing that it might have potentially violated the Foreign Corrupt Practices Act (FCPA).
“In August 2020, we identified practices in our Evergreen Packaging Shanghai business (EPS), which is part of our beverage merchandising segment, that involve acts potentially in violation of the FCPA,” the company said.
“While our investigation into these practices—which is being conducted by external counsel, accountants, and other advisors—is not complete, we believe we have identified the occasional giving of gift cards representing relatively minor monetary values to government regulators in the People’s Republic of China (PRC) and/or employees of one or more state-owned enterprises in the PRC, over the course of several years,” the regulatory filing continued. “In addition, it is possible that EPS potentially violated the FCPA by engaging external consultants to interact with government regulators in the PRC to avoid potential adverse action by those regulators.”
Pactiv called the amounts involved “immaterial, individually and in the aggregate,” and added that it has “initiated procedures to remediate such practices, including discontinuing the giving of gift cards and the engagement of any such consultants.” Additionally, Pactiv said it has voluntarily reported these matters to the U.S. Department of Justice and U.S. Securities and Exchange Commission and that it intends to “fully cooperate” with these agencies, with the assistance of legal counsel.
“While we are not aware of any other acts at EPS which could be a violation of the FCPA or other similar laws, our investigation is ongoing, and there can be no assurance that other violations have not been made,” the company said. “We are unable at this time to predict when our or the government agencies’ review of these matters will be completed or what regulatory or other consequences may result from these matters.”
Over the last several decades, Pactiv has undergone a series of strategic mergers and corporate realignments, yo-yoing the company from private to public to private and now back to public again. According to the company’s website, Pactiv reverted to a privately held firm in 2010, when it was acquired by Reynolds Group Holdings, a global manufacturer and supplier of consumer food. The company supplies every major foodservice retailer and distributor in North America, including McDonald’s, Wendy’s, Burger King, Walmart, Kroger, and Tim Horton’s.