WASHINGTON - The Securities and Exchange Commission on Tuesday charged Goodyear Tire & Rubber (GT) with failing to halt bribery in Kenya and Angola aimed to win tire sales.
The tire maker will pay about $16 million to settle the case.
Securities regulators said Goodyear's subsidiaries in the African countries paid more than $3.2 million in bribes to employees of government-owned and private companies, and to local officials. The agency says that the bribes, paid "routinely" from 2007 through 2011, were hidden in company books by being falsely recorded as legitimate business expenses.
"Bribes were generally paid in cash to employees of private companies or government-owned entities as well as other local authorities such as police or city council officials," the SEC said in a statement. "The improper payments were falsely recorded as legitimate business expenses in the books and records of the subsidiaries, which were consolidated into Goodyear's books and records."
Goodyear shares were largely flat on Tuesday, closing at $27.13.
Goodyear, based in Akron, Ohio, neither admitted nor denied the allegations. The company is turning over about $14 million in alleged illicit profits plus $2 million in interest. The SEC said the settlement amount took into account Goodyear having reported the problems to regulators, taking steps to correct them and cooperating with its investigation.
In addition, Goodyear agreed to report to the SEC its progress in strengthening anti-bribery programs over the next three years.
Goodyear voluntarily reported to the government the findings of its internal review of the alleged conduct and cooperated in the federal investigation, it said. The company said it continues to take corrective action and it encouraged employees to contact its confidential ethics hotline if they suspect improper conduct.
Goodyear sold its ownership interest in the Kenya tire business in 2013 and is in the process of selling the Angolan business.
The settlement "fully resolves all outstanding issues related to these investigations," Goodyear said.
"This settlement ensures that Goodyear must forfeit all of the illicit profits from business obtained through bribes to foreign officials as well as employees at commercial companies in Angola and Kenya," Scott Friestad, associate director of the SEC's Enforcement Division.