Cemex, a Mexican multinational building materials company, disclosed last month in a securities filing that the U.S. Department of Justice has requested from it information regarding an ongoing Foreign Corrupt Practices Act investigation.

First, a word of background: In December 2016, CEMEX received subpoenas from the Securities and Exchange Commission seeking information to determine whether violations of the FCPA occurred concerning a cement plant project, being built by CEMEX Colombia, in the Department of Antioquia in the municipality of Maceo, Colombia (the “Maceo Project”). “These subpoenas do not mean that the SEC has concluded that CEMEX or any of its affiliates violated the law,” the company stated in the securities filing.

According to CEMEX, internal audits and investigations by CEMEX and CEMEX Latam had raised questions about payments relating to the Maceo Project. The payments made to the non-governmental individual representing CI Calizas y Minerales regarding the Maceo Project did not adhere to CEMEX and CEMEX Latam’s internal controls.

In September 2016, the CEMEX Latam and CEMEX Colombia officers responsible for the implementation and execution of the questionable payments were terminated and the then-Chief Executive Officer of CEMEX Latam, Carlos Jacks, resigned at the time. CEMEX said it “has been cooperating with the SEC and the Colombian Attorney General’s Office and intends to continue cooperating fully with the SEC and the Attorney General’s Office.”

CEMEX previously disclosed that it was possible that the Justice Department and other investigatory authorities in other jurisdictions could also open investigations into this matter. As such, on March 12, 2018, the Justice Department issued a grand jury subpoena to CEMEX relating to the company’s operations in Colombia and other jurisdictions, the securities filing disclosed.

CEMEX said it “intends to cooperate fully” with the SEC, Justice Department, and any other investigatory body. As of March 14, 2018, CEMEX said it’s unable to predict at this time the duration, scope, or outcome of these investigations, or the potential sanctions that could result.

Topics