Deere Settles SEC Probe Over Cash and Massage Parlour Bribes
Bribery Allegations Against Deere
Deere has agreed to pay $10 million to settle charges from the US Securities and Exchange Commission (SEC) regarding allegations that its Thai subsidiary engaged in bribery. Between late 2017 and 2020, senior managers at Wirtgen Thailand were involved in improper payments to various government officials, including those from the Royal Thai Air Force and Thailand’s Department of Highways.
Improper Payments and Rewards
The SEC’s investigation revealed that these officials received cash payments, as well as sham consulting fees. To further persuade officials, Deere funded overseas trips disguised as factory visits alongside visits to massage parlours.
- Between 2017 and 2020, Wirtgen Thailand secured multiple lucrative contracts from government agencies.
- Notably, a $2.3 million contract was awarded in December 2018 from the Department of Highways.
Deere's Accountability: In October 2019, the company reportedly paid nearly $50,000 for a trip to Germany for four officials from the department and their wives, which notably omitted actual factory visits.
SEC Findings and Settlement Details
The SEC found Deere in violation of the Foreign Corrupt Practices Act regarding its accounting practices. As part of the settlement, Deere agrees to pay:
- $4.5 million in civil penalties,
- $4.3 million in disgorgement of profits,
- $1.1 million in interest.
Recognizing the severity of these issues, Deere has improved its compliance programs and dismissed staff involved in the misconduct.
Company's Commitment: Deere acknowledges that the actions taken by Wirtgen Thailand contradict its policies and values. As the world's largest agricultural equipment manufacturer, the company emphasizes integrity as a core value.Market Implications for Deere
In light of these events, Deere has reduced its profit forecast for 2024, impacted by farmers' reluctance to invest in costly agricultural machinery due to rising borrowing costs and declining crop prices. This situation raises concerns over future compliance and growth strategies.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.