Japanese electronics giant Panasonic announced on Monday that it has agreed to pay about $280 million to resolve the federal charges that its executives at its in-flight entertainment unit hid payments to consultants overseas in violation of anti-corruption rules.
The Japanese electronics giant's parent company will pay $143 million to the Securities and Exchange Commission, while its Southern California subsidiary, Panasonic Avionics, will pay $137 million in penalties to the U.S. Justice Department, federal prosecutors said.
Panasonic Avionics was accused of concealing payments to the third-party sales agents between 2007 and 2016, in violation of the accounting provisions of the Foreign Corrupt Practices Act. Those payment were improperly recorded in Panasonic’s regulatory filings.
In one case, Panasonic hired a foreign official as a consultant while the official was simultaneously negotiating a contract between the company and a government-owned airline. The official was paid $875,000 over six years, despite doing "little work," according to documents.
According to a statement from Panasonic on Monday, the case has prompted internal changes at Panasonic, including "appointing a new management team and substantially reducing, and enhancing controls around, the use of third-party agents and consultants”. Panasonic Avionics also agreed to engage an independent compliance monitor for a period of two years.