Kraft Foods, the world’s second-largest food company, received a subpoena from the SEC related to the federal watchdog’s investigation into the Illinois-based company’s possible violations of foreign bribery law, according a regulatory filing.
The probe centers around Kraft’s possible violation of the Foreign Corrupt Practices Act in connection with its takeover of a facility in India as part of its February 2010 acquisition of the UK confectionery company Cadbury.
‘Kraft has an aggressive compliance program,’ says Dick Cassin, an attorney who writes frequently about the FCPA. ‘But with acquisitions, things happen quickly and acquiring companies can't always do as much due diligence as they'd like.’
After the acquisition, ‘the company’s overall state of compliance was sound,’ Kraft claims. Kraft has not publicly disclosed what it found or why the SEC subpoena is limited to India.
‘A complaint and ethical corporate culture, which includes adhering to laws and industry regulations in the United States and abroad, is integral to our success,’ Kraft’s filing says. The company also maintains it is cooperating with the US government in the investigation.
Now, the SEC is calling for information while examining potential FCPA violations concerning Kraft’s transactions with Indian government agencies, the company says. The FCPA prohibits illicit payments to foreign officials who attempt to obtain or keep business in a certain country.
