2 May 2018
Panasonic Avionics is a subsidiary of Japanese electronics giant Panasonic. US Department of Justice (DoJ) on Monday revealed that Panasonic Avionics will pay the fine of $137 to resolve charges levied under the Foreign Corrupt Practices Act (FCPA).
Panasonic Avionics Corp. (PAC) used consultants to pay kick-backs to third-party sales agents. DoJ cited a case where a consultant was paid $875,000 by PAC over a six-year period as the company reaped over $92 million in profits “from portions of the contract over which the consultant had some involvement or influence” while being employed by a government-owned airline in the Middle East linked to the contract. PAC provides in-flight entertainment and communications, including WI-FI services to airline passengers. It employs 4500 people in the US.
Acting Assistant Attorney General said that Panasonic Avionics Corporation caused its publicly traded parent company to falsify its books and records to hide its improper payments. Panasonic used sales agents in China and elsewhere in Asia to make more than $7m in illegal payments to at least 13 sub-agents.
PAC also agreed to retain an independent corporate compliance monitor for a period of at least two years.
The US Securities and Exchange Commission (SEC) filed a cease and desist order against Panasonic. The company has agreed to pay roughly $143 million in fines. In total Panasonic and PAC must pay US regulators $280 million.
The company announced replacement of its CEO and Chief Financial Officer in order to clean up the house.
Panasonic Avionics the world’s second largest in-flight connectivity provider. It has an estimated 1,300 aircraft equipped for its in-flight connectivity service, plus 2,200 aircraft waiting for installation.
