Daimler to pay $185 mn to settle bribery charges

German automaker Daimler AG will shell out $185 million to the US authorities to settle charges of the company bribing foreign government officials.

As part of the settlement, Daimler would pay $91.4 million to the Securities and Exchange Commission (SEC) and another $93.6 million to the Department of Justice.

The carmaker "engaged in a repeated and systematic practice of paying bribes to foreign government officials to secure business in Asia, Africa, Eastern Europe and the Middle East", according to the SEC.

The market regulator in a statement yesterday said that Daimler agreed to pay $91.4 million "in disgorgement" to settle its charges.

Another $93.6 million would be given to the Department of Justice to settle charges in separate criminal proceedings.

Going by the SEC, Daimler paid at least $56 million in improper payments over a period of more than 10 years.

"The payments involved more than 200 transactions in at least 22 countries. Daimler earned $1.9 billion in revenue and at least $90 million in illegal profits through these tainted sales transactions, which involved 6,300 commercial vehicles and 500 passenger cars," the statement noted.

Moreover, the auto maker paid kickbacks to Iraqi ministries in connection with direct and indirect sales of motor vehicles and spare parts under the United Nations Oil for Food Programme, it added.

SEC's Director (Division of Enforcement) Robert Khuzami, said, "It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice.

"The financial and reputational costs incurred by Daimler as a result are a lesson that should be studied closely by all companies."

As per the SEC complaint filed with a US court, Daimler used bribes to further government sales in such countries as Russia, China, Vietnam, Nigeria, Hungary, Latvia, Croatia, and Bosnia.

Going by the allegation, the carmaker paid bribes through phony sales intermediaries, corrupt business partners and by way of cash desks.

"The bribery permeated several major business units and subsidiaries, was sanctioned by members of Daimler's management, and continued during the course of the SEC's investigation," the statement said.