Hitachi to Pay $19M for Accounting Claims

     (CN) – Tokyo business conglomerate Hitachi agreed to settle claims that it wasn’t honest about paying a South African political group for power plant contracts, the SEC said Monday.
     The U.S. Securities and Exchange Commission said Hitachi Ltd. agreed to pay $19 million to settle charges for alleged Foreign Corrupt Practices Act violations. The Tokyo-based conglomerate “inaccurately recorded improper payments to South Africa’s ruling political party in connection with contracts to build two multi-billion dollar power plants,” the government claims.
     Hitachi sold a 25-percent stake in a subsidiary to a company serving as a front for the African National Congress, the SEC says, allowing ANC to profit from contracts that Hitachi secured. Hitachi paid $5 million to ANC’s front company, Chancellor House Holdings, after locking down two power station contracts, according to the government. It also allegedly paid Chancellor an additional $1 million in “success fees” that was recorded without documentation as consulting fees.
     The company agreed to settle the allegations without admitting to or denying them. The settlement is subject to court approval.
     “Hitachi’s lax internal control environment enabled its subsidiary to pay millions of dollars to a politically-connected front company for the ANC to win contracts with the South African government,” Andrew Ceresney, SEC’s enforcement division director, said in a statement.
     Hitachi is involved in the healthcare, industrial, defense, energy and telecommunications industries, according to its website.

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