Deere Agrees to Pay $10 Million in Settlement Over Thai Subsidiary Bribery Case
PUBLISHED: 11 Sep 2024 at 16:32
In a significant compliance move, the agricultural and construction equipment manufacturer Deere has reached a settlement agreement to pay $10 million in connection with allegations involving bribery by its Thai subsidiary, Wirtgen Thailand, from 2017 to 2020.
According to the U.S. Securities and Exchange Commission (SEC), the bribery schemes included providing state officials with lavish gifts, such as luxury trips and massage services, in exchange for business opportunities. These actions reportedly violated the Foreign Corrupt Practices Act (FCPA), which prohibits such improper influences on government officials.
The SEC detailed that Wirtgen Thailand’s offenses occurred between late 2017 and 2020, involving recipients from various state agencies, including the Royal Thai Air Force and the Department of Highways. Specific identities of the bribed officials remain undisclosed.
Additional allegations mentioned that bribes were also funneled to a prominent Thai construction company merely referenced as “Company A” in SEC documents. The SEC investigation found that payments, which contradict Wirtgen Thailand’s code of conduct, took the form of cash, extravagant meals, and deceptive consulting fees, disguised as recreation and entertainment activities in Europe.
A notable exchange between Wirtgen executives highlighted the troubling culture within the subsidiary, indicating a systematic approach to gaining favor with government agencies through illicit means.
Deere’s $10 million settlement includes a civil fine of $4.5 million, the return of $4.34 million in improper benefits, and $1.09 million in accrued interest. The SEC also noted Deere’s cooperation during the investigation and its subsequent efforts to terminate involved employees and enhance its compliance frameworks.
Deere emphasized its commitment to ethical standards and integrity, condemning the actions of its subsidiary. This incident serves as a crucial reminder for corporations to implement effective compliance measures when managing newly acquired entities to prevent lapses in governance.
