Mondelez International, the U.S. parent of Mondelez India, recently disclosed in a securities filing that is being investigated by the U.S. Securities Exchange Commission and the Department of Justice for potential violations of the Foreign Corrupt Practices Act related to its operations in India.
After acquiring Cadbury in February 2010, Mondelez International said it “began reviewing and adjusting, as needed, Cadbury’s operations in light of applicable standards as well as our policies and practices.” Initially, the company focused on such high-priority areas as food safety, the FCPA, and antitrust, the company said in a Form 10-K last month.
“Based upon Cadbury’s pre-acquisition policies and compliance programs and our post-acquisition reviews, our preliminary findings indicated that Cadbury’s overall state of compliance was sound,” the company said. Nonetheless, through reviews, it appeared that facts and circumstances in certain jurisdictions, including India, warranted further investigation.
“We are continuing our investigations in certain jurisdictions, including in India, and we continue to cooperate with governmental authorities,” Mondelez International said in the securities filing.
In February 2011, Mondelez International received a subpoena from the SEC regarding an investigation into possible violations of the FCPA, “primarily related to a facility in India that we acquired in the Cadbury acquisition,” the company stated. “The subpoena primarily requests information regarding dealings with Indian governmental agencies and officials to obtain approvals related to the operation of that facility.”
Mondelez International said it continues to cooperate with the U.S. and Indian governments in their investigations of these matters, “including through ongoing meetings with the U.S. government to discuss potential conclusion of the U.S. government investigation.”
In February 2016, Mondelez International said it received a “Wells” notice from the SEC, indicating that the staff has made a preliminary determination to recommend that the SEC file an enforcement action against us for violations of the books and records and internal controls provisions of the Exchange Act in connection with the investigation. “We intend to make a submission to the staff of the SEC in response to the notice,” the company said.