Hewlett-Packard Close to Settling Bribery Charges
Hewlett-Packard (NYSE:HPQ) announced on Monday that it’s coming closer to reaching a settlement with regulators over bribery charges that first came to light in 2010. HP made the announcement in its annual 10-K filing with the U.S. Securities and Exchange Commission, one of the two regulators investigating the personal computer maker. Hewlett-Packard is also being investigated by the U.S. Department of Justice.
The investigations involve charges that some HP employees bribed their way into an IT contract with the Russian government. According to AllThingsD’s original coverage of the incident, a German subsidiary of Hewlett-Packard allegedly paid billions of dollars to bribe Russian officials for the contract. Bribing foreign officials is outlawed by the Foreign Corrupt Practices Act.
German authorities are also investigating HP on the matter, having indicted four people involved on charges of bribery, breach of trust, and tax evasion. Two of the indicted people are former HP employees and one currently works for the company, according to a report from AllThingsD.
The 35 million-euro deal between the German HP subsidiary and the Russian General Prosecutor’s Office involved HP helping build a new IT network at a Russian agency between 2001 and 2006. The 10-K filing says that Hewlett-Packard is working with authorities to settle the matter and is moving forward with discussions to settle the charges in the United States. In addition, the company revealed that it is dealing with other bribery allegations relating to operations in Mexico and Poland, as well.
Meanwhile, the company’s stock has performed particularly well in the past year, as CEO Meg Whitman’s turnaround project has yielded results that investors like. Whitman receive a giant raise in acknowledgement of her hard work. After agreeing to only have a symbolic salary of $1 in 2012 while the company struggled, Whitman will be paid $1.5 million for 2013.
It won’t be known what kind of effect the settlement could have on HP’s stock until it’s revealed how much the company has to pay for its alleged breach of the Foreign Corrupt Practices Act.
More from Wall St. Cheat Sheet:
- Hewlett-Packard’s Board Says It’s Pay Day for Meg Whitman
- Hewlett-Packard’s Meg Whitman: Don’t Count Out Desktops
- What’s Next in HP’s Extensive Layoff Plan?
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