“The sanctions imposed under the settlement agreement reflect the level of cooperation that hitachi, Ltd. provided in the investigation of the Medupi case, for which IACD is grateful,” said Anna Bossman, Director of IACD. “Hitachi has demonstrated through its actions that it is committed to doing business ethically, and IACD believes in honouring this commitment. As I said earlier, the IACD is always ready to settle allegations of sanctionable practices amicably with companies that demonstrate a sincere commitment to integrity, work together to resolve allegations, and choose to improve their compliance policies and procedures. Hitachi agreed to pay $19 million to pay the SEC`s fees. Without admitting or denying the SEC`s allegations, Hitachi agreed to a settlement that would require the company to pay a $19 million fine, and it would be permanently excluded from future violations. The rules are subject to the approval of the judges. The AfDB acknowledges that Hitachi and its affiliates have cooperated fully and openly with the IACD investigation and that Hitachi has always been committed to maintaining its good relations with the AfDB and protecting the integrity of the Medupi project. Despite their differences, both sides shared the desire to resolve the current difficulties through a solution. “Hitachi`s lax internal control environment has allowed its subsidiary to pay millions of dollars to a politically connected shell company so that the ANC can win contracts with the South African government,” said Andrew J.
Ceresney, director of the SEC`s Enforcement Division. “Hitachi then illegally characterized these payments in its books and records as consulting fees and other legitimate payments.” The African Development Bank Group (“AfDB”) announces that on November 30, 2015, it entered into a settlement agreement with Hitachi, Ltd. (“Hitachi”) of Tokyo, Japan. The Securities and Exchange Commission today accused Tokyo-based conglomerate Hitachi, Ltd., of violating the Foreign Corrupt Practices Act (FCPA) by inaccurately recording inappropriate payments to South Africa`s ruling political party in connection with contracts to build two multi-billion dollar power plants. Abidjan International Trade Center Building CCIA In part due to hitachi`s high level of support for IACD, the AfDB has agreed to impose the twelve-month exclusion sanction on HPE and HPA, the two companies at the heart of the IACD investigation. The exclusion will end as soon as Hitachi expands its integrity compliance program to the standards of the AfDB`s Integrity Compliance Guidelines. In addition, Hitachi has voluntarily agreed (1) to make a significant financial contribution to the AfDB, which will be used to finance worthy anti-corruption enterprises on the African continent; and (2) cooperate with IACD on various issues, including the need to improve its current integrity compliance program mentioned above. The Integrity and Anti-Corruption Division of the African Development Bank Group is responsible for preventing, deterring and investigating allegations of corruption, fraud and other sanctionable practices in operations financed by the Banking Group. On October 30, 2007, Eskom awarded the HPE and HPA consortium the AfDB-funded boiler contract for the Medupi Power Plant for the design, manufacture, supply, construction and commissioning of six coal-fired steam generators at its Medupi plant in Lephalale, in Limpopo Province, South Africa. Johann Benöhr led the IACD study with the support of Funmilayo Akinosi and Simeon Obidairo. Lee Marler, Neil Macaulay and Alex Haines of Bretton Woods Law, London, represented IACD. “We particularly appreciate the support we have received from the Integrity and Anti-Corruption Division of the African Development Bank and hope this is the first in a series of collaborations,” said Kara Brockmeyer, Head of the FCPA Unit in the SEC`s Enforcement Division. Hitachi`s misconduct violated the books and records and internal accounting control provisions of federal securities laws, in particular sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934.
Employees of the African Development Bank and the general public can use IACD`s secure helplines to report sanctionable practices within the bank or operations financed by the banking group. According to the SEC`s lawsuit filed with the U.S. District Court for the District of Columbia: STAY CONNECTED 1 Twitter 2 Facebook 3RSS 4YouTube 6LinkedIn 8 Email Updates We`re here to help and support you if you`re affected by the coronavirus. Please read our latest updates here. Already a customer? More useful information about your credit and account can be found here. For more information, see: www.afdb.org/about-us/structure/integrity-and-anti-corruption/ Find answers to your questions about payments, changes in circumstances, and other account-related questions. The SEC investigation was conducted by Jon Jordan and Thierry Olivier Desmet of the FCPA unit in Miami with the support of Kathleen Strandell, David S. Johnson and Matthew P. Cohen. The SEC appreciates the support of the Fraud Division of the Department of Justice, the Federal Bureau of Investigation, the Integrity and Anti-Corruption Division of the African Development Bank and the South African Financial Services Board. About the Integrity and Anti-Corruption Department: The settlement agreement follows a three-year investigation by the AfDB`s Integrity and Anti-Corruption Division (IACD) into allegations of sanctionable practices by certain Hitachi subsidiaries in connection with the boiler room contract for the AfDB-funded Medupi Power Plant in the Republic of South Africa.
IACD asserted that, at the material time, Germany-based Hitachi Power Europe GmbH (“HPE”) and its South African subsidiary Hitachi Power Africa (Pty) Ltd. (“HPA”) used sanctionable practices to win the boiler construction contract. The SEC says Hitachi sold a 25% stake in a South African subsidiary to a company that served as a front for the African National Congress (ANC). This agreement gave the shell company and the ANC the opportunity to share the profits of all the power plant contracts hitachi received. Hitachi eventually received two contracts to build power plants in South Africa and paid shell company ANC about $5 million in “dividends” based on contract profits. Through a separate, undisclosed agreement, Hitachi paid the shell company an additional $1 million in “success fees” that were incorrectly recorded as consulting fees without proper documentation. Postal correspondence must be marked “CONFIDENTIAL” and sent to the following address: .