Washington-UK’s WPP has agreed to pay more than $19 million in a settlement with US officials over bribery allegations and accounting controls for its subsidiaries, including India and China.
The US Securities and Exchange Commission said the world’s largest advertising firm did not admit or deny allegations of violating provisions of the Foreign Corrupt Practices Act, but agreed to pay the fine.
The SEC order found that WPP failed to ensure that the subsidiaries it acquired implemented its internal accounting controls and compliance policies.
Citing potential conflicts in India, China, Brazil and Peru during the period between 2013 and 2018, WPP implemented an aggressive business development strategy that included acquiring a majority stake in several local advertising agencies in high-risk markets.
WPP said it has since changed its business practices.
The company said in a statement, “As ordered by the Commission, WPP’s new leadership has strengthened new compliance measures and controls, fundamentally changed its approach to the acquisition, and fully cooperated with the Commission.” and terminated those involved in the misconduct.”
WPP founder Martin Sorrell, who declined to comment to Reuters on the agreement, led the company for more than 30 years before leaving in April 2018. He was replaced as chief executive by another company veteran, Mark Reid.
The SEC said that WPP “failed to respond promptly or adequately to repeated warning signs of corruption or control failures at certain subsidiaries.”
In one example cited by the Commission, a subsidiary in India continued to bribe Indian government officials in exchange for advertising contracts, although WPP had received seven anonymous complaints related to the conduct.
“One cannot allow a company to focus on profitability or market share at the expense of appropriate controls,” said Charles Cain, head of the SEC’s FCPA unit.
Friday’s move comes at a time when the country’s top securities watchdog is trying to stamp out abuses in US markets over a lack of necessary controls by companies.
by Katanga Johnson
This News Originally From – The Epoch Times