Panasonic Corporation (OTCMKTS:PCRFY) was charged with accounting fraud by the SEC relating to bribery of a government official in a wholly-owned subsidiary, Panasonic Avionics Corp. In its decision, the Securities and Exchange Commission said PCRFY’s subsidiary paid the official $875,000 to influence contracts worth $700 million.
Panasonic agreed to pay $143 million as a penalty for its actions under the Foreign Corrupt Practices Act involving its global avionics business.
The SEC Order also found that Panasonic overstated pre-tax and net income by prematurely recognizing more than $82 million in revenue for the quarter ending June 30, 2012. The fraud was perpetrated by the Subsidiary’s backdating an agreement that mislead the auditor.
Regulators also found that Panasonic lacked adequate internal accounting controls that should have caught the fraudulent action.
Surprisingly, there has been no criminal charges levied against Panasonic executives.
Shares of Panasonic (OTCMKTS: PCRFY) surprisingly showed little reaction to the news on April 30th when the charges were levied by the SEC. Panasonic is a Japan-based company that trades on the Tokyo Stock Exchange under the symbol TYO: 6752. PCRFY is an ADR.