Nortek disclosed last week in a regulatory filing with the Securities and Exchange Commission that it has launched an internal investigation into potential violations of the Foreign Corrupt Practices Act concerning potential improper payments made by its Chinese manufacturing unit.
In a Form 8-K, dated Jan. 15, the maker of home security and thermostat systems said it discovered “certain questionable hospitality, gift and payment practices, and other expenses” at its Chinese subsidiary, Linear Electronics, as part of its routine internal audit activities. These practices are “inconsistent with the company’s policies and raise concerns under the FCPA and perhaps under other applicable anti-corruption laws,” the Form 8-K stated.
Nortek said it has enlisted the help of outside counsel in the investigation. It also said it has voluntarily disclosed these matters to the SEC and the Department of Justice, and that it intends to cooperate with these agencies into these matters.
At this time, however, the company noted that it’s unable to predict what, if any, enforcement action the government may pursue.
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