AB InBev has agreed to pay $6 million to settle claims for improper payments to government officials in India. Allegedly AB InBev’s Indian joint venture partner violated the Foreign Corrupt Practices Act and blocked a whistleblower from supporting the U.S. Securities and Exchange Commission (SEC) investigation into the misconduct.
The SEC issued a press release saying that “an SEC investigation found that the company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production of Anheuser-Busch InBev products in that country. Despite repeated complaints from employees, Anheuser-Busch InBev had inadequate internal accounting controls to detect and prevent the improper payments, and the company failed to ensure that transactions involving the promoters were recorded properly in its books and records.”
The SEC further found out, “that Anheuser-Busch InBev entered into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about potential FCPA violations due to a substantial financial penalty that would be imposed for violating strict non-disclosure terms.”
To settle the charge, AB InBev agreed to pay $2,712,955 in disgorgement plus interest of $292,381 and in addition a penalty of $3,002,955.”
According to a press release in February 2015, AB InBev announced the entry into an agreement with RJ Corp Ltd under which AB InBev would exit the Indian joint venture with RJ Corp Ltd and move staff and operations of the joint venture to Crown Beers India Private Ltd, a wholly-owned subsidiary of AB InBev. Later in February 2015, AB InBev exited the Indian joint venture with a transition period into mid-2015.