ABB Settles SEC Charges that it Engaged in Bribery Scheme in South Africa

Washington, D.C.--(Newsfile Corp. - December 3, 2022) - The Securities and Exchange Commission today announced charges against global electrification and automation technology company, ABB Ltd, for violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bribery scheme in South Africa. The company has agreed to pay a $75 million civil penalty to settle the SECs charges.

The SECs order finds that, from 2015 through 2017, ABB executives in Switzerland and South Africa colluded with a high-ranking government official at Eskom, an electricity provider owned by the South African government, to funnel bribes to the official through complicit third-party service providers with whom the government official had close personal relationships. ABB paid the service providers more than $37 million to bribe the government official. In return ABB obtained a $160 million contract to provide cabling and installation work at Eskoms Kusile Power Station.

Notwithstanding prior FCPA-related violations and known corruption risks throughout its operations, ABB lacked sufficient controls to detect or deter this egregious bribery scheme, said Charles Cain, Chief of the SECs FCPA Unit.

ABB consented to the SECs cease-and-desist order that it violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA and agreed to pay a civil monetary penalty of $75 million. The SEC also ordered ABB to pay more than $72 million in disgorgement; however, the Commission deemed the payment satisfied by ABBs reimbursement of its ill-gotten gains to the South African government as part of an earlier civil settlement based largely on the same underlying facts as the SECs action. In addition, ABB agreed to regularly report to the SEC for a three-year period the status of its ongoing remediation of its internal accounting controls and compliance program. ABB was the subject of two prior FCPA cases by the SEC in 2004 and 2010.

The SECs action is part of a coordinated global settlement that includes the United States Department of Justice (DOJ) and criminal authorities in South Africa and Switzerland. In its parallel case, the DOJ fined ABB $315 million to settle criminal charges.

The SECs investigation was conducted by Steven A. Susswein and Sonali Singh and was supervised by Tracy L. Price, Deputy Chief of the FCPA Unit.

You May Also Be Interested In

• Fisker (FSR) files form 10-K, sees more job cuts, reiterates going concern doubts
• Pioneer Power (PPSI) Receives Nasdaq Non-compliance Notice
• Cidara Therapeutics (CDTX) Receives Nasdaq Delinquency Notice