IBM pays $ 10 million to settle Foreign Corrupt Practices complaint

Mar 23, 2011. IBM has agreed to pay $10 million to settle a complaint its employees bribed South Korean and Chinese officials with cash, gifts and entertainment in return for business for more than a decade.

The U.S. Securities and Exchange Commission alleged employees of IBM Korea and a local joint venture with LG Electronics paid bribes to South Korean government officials, according to a court document.

One manager in Korea twice handed over shopping bags full of cash, totaling 40 million Korean won ($38,186), in parking lots, while another paid into the bank account of a “hostess in a drink shop” to win business, the SEC said.

IBM employees in China also provided gifts, overseas trips and entertainment to government officials, it said, adding that the misconduct involved over 100 local employees, including some key IBM-China employees.

Local employees created slush funds to pay for improper gifts such as cameras and laptop computers to Chinese government officials, the SEC said.

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