Washington — The UK’s WPP has agreed to pay more than $ 19 million in a settlement with US authorities related to alleged bribery and accounting of subsidiaries, including India and China.
According to the US Securities and Exchange Commission, the world’s largest advertising company did not accept or deny allegations of violating the Foreign Corrupt Practices Act, but agreed to pay a fine.
A SEC order revealed that WPP was unable to ensure that the acquired subsidiary enforced its internal accounting and compliance policies.
WPP will acquire a majority stake in many localized advertising agencies in high-risk markets, citing potential disputes in India, China, Brazil and Peru between 2013 and 2018 We have implemented an aggressive business growth strategy that includes this.
WPP said it has changed its business practices since then.
In a statement, the company said, “As the Commission’s order allows, WPP’s new leadership will introduce strong new compliance measures and controls, radically change the approach to acquisitions and reach the Commission entirely. We worked together to end those involved in cheating. “
WPP founder Martin Sorrell, who refused to comment on the settlement with Reuters, led the company for over 30 years before resigning in April 2018. He was replaced by another company veteran Mark Read as CEO.
WPP has failed to “quickly or appropriately respond to repeated corruption warning signs or control failures at a particular subsidiary,” the SEC said.
In one example cited by the Commission, the Indian subsidiary continued to bribe Indian government officials in return for the advertising contract, despite WPP receiving seven anonymous complaints about its conduct.
“Companies cannot be allowed to focus on profitability or market share at the expense of proper management,” said Charles Cain, SECFCPA Unit Chief.
The move on Friday is as the top US securities watchdog seeks to eradicate abuse in the US market due to the lack of control required by businesses.
Katanga Johnson
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