ASEAN KEY DESTINATIONS
Graft case refreshes memories of Thaksin era
Liquor giant Diageo will pay US authorities more than US$16 million to settle charges that it bribed officials in India, Thailand and South Korea, US officials and the company said Wednesday.
London-based Diageo and its subsidiaries paid over $2.7 million in bribes for more than six years to obtain tax and sales benefits for Johnnie Walker whiskey and other brands, the US Securities and Exchange Commission said.
"For years, Diageo's subsidiaries made hundreds of illicit payments to foreign government officials," Scott Friestad, associate director of the SEC's enforcement division, said in a statement.
From 2003 to 2009, the company paid more than $1.7 million to hundreds of Indian government officials responsible for either purchasing or authorizing the sale of its beverages in India, the SEC said.
In Thailand, Diageo paid approximately $600,000 to a high-ranking government official from 2004 to 2008 so he would lobby on the company's behalf in various tax and customs disputes, the SEC said.
- In Thailand, from 2004 through mid-2008, Diageo paid approximately $12,000 per month – totaling nearly $600,000 – to retain the consulting services of a Thai government and political party official. This official lobbied extensively on Diageo’s behalf in connection with multi-million dollar pending tax and customs disputes, contributing to Diageo’s receipt of certain favorable dispositions by the Thai government. - From the SEC report And in South Korea, Diageo paid a customs official 100 million won ($86,000) for helping the company get a tax rebate, while paying travel and entertainment expenses to officials involved in tax negotiations with Diageo.
"Separately, Diageo routinely made hundreds of gift payments to South Korean military officials in order to obtain and retain liquor business," the SEC said in its statement.
Diageo, which first disclosed the SEC's investigation in 2009, agreed to pay more than $16 million to settle charges that it violated the US Foreign Corrupt Practices Act (FCPA), although it did not admit wrongdoing.
"Diageo takes the SEC's findings seriously and regrets this matter," the company said in a statement.
One of the reasons the Thai military staged a coup to topple Mr. Thaksin in 2006 was widespread corruption. This graft case comes at a bad time as the Pheu Thai party, backed from abroad by Thaksin and led by his youngest sister, Yingluck, gets set to assume office.
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