HP In $108 Mln Settlement With SEC, DOJ Over Foreign Bribery Probe - Update

(RTTNews) - Hewlett-Packard Co (HPQ) Wednesday agreed to pay about $108 million to the U.S. Securities and Exchange Commission and the Department of Justice to settle a probe into violations of the Foreign Corrupt Practices Act.

The two U.S. government agencies charged the company's subsidiaries in Russia, Poland and Mexico of having made improper payments to government officials to obtain or retain lucrative public contracts.

As part of the settlement, Palo Alto, California-based HP agreed to undertake certain compliance, reporting and cooperation obligations.

"The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company," said John Schultz, executive vice president and general counsel, HP.

"HP fully cooperated with both the Department of Justice and the Securities and Exchange Commission in the investigation of these matters..."

The SEC charged that HP's subsidiary in Russia, ZAO Hewlett-Packard A.O., paid more than $2 million through agents and shell companies to a Russian government official to retain a multi-million dollar contract with the federal prosecutor's office. The scheme involving the Russian subsidiary occurred from about 2000 to 2007.

In Poland, the company's subsidiary, Hewlett-Packard Polska Sp. Z o.o., provided gifts and cash bribes worth more than $600,000 to a Polish government official to obtain contracts with the national police agency. The SEC order finds that bribes occurred from about 2006 to 2010.

Also, as part of its bid to win a software sale to Mexico's state-owned petroleum company, HP's subsidiary in Mexico paid more than $1 million in inflated commissions to a consultant with close ties to company officials, and money was funneled to one of those officials.

Detailing the settlement, SEC said that HP agreed to pay $29 million in disgorgement, prejudgment interest of $5 million, and fines totaling $74.2 million.

HP stock is trading at $32.74, up $0.29 or 0.89%, on a volume of 8.7 million shares on the NYSE.