Avon vice chairman let go in wake of bribery probe

By Simon Pitman

- Last updated on GMT

Related tags: Board of directors

Avon Products has confirmed in an SEC filing that its vice chairman Charles Cramb has been fired following ongoing investigations into bribery centred on its China operations.

The company confirmed that the executive had been let go, with the filing underlining the fact that it was in connection with the investigations into possible material-disclosure violations that may have involved the bribery of officials in several countries.

“These matters are ongoing and no final determinations regarding these matters can be made at this time. The financial terms of his separation are subject to future determination in connection with such matters,”​ the SEC filing stated.

Ongoing investigation continues to hit company's image

To date, the company is continuing with internal investigations showing that since 2004 the company may have made millions of dollars in unofficial payments to officials all over the world.

The law firm highlights that, beyond China, the company may also have made illegal payments to officials in countries including Brazil, Mexico, Argentina, India and Japan.

The internal investigations begun in June of 2008, aimed at getting to the bottom of whether or not officials at the company had violated the Foreign Currency Practices Act – a law that makes it illegal for US businesses to bribe foreign officials.

Four executives fired in 2010

Initially the company announced the suspension of four executives in April of 2010, following an investigation that was first initiated when the matter came to light, in 2009.

Those four executives – three of whom were based in China, the other being the company’s chief of global internal audit and security – were all fired over bribery charges that included improper use of travel and entertainment expenses.

Last month Avon announced that its Chairman and CEO Andrea Jung, will become Executive Chairman, in a move that makes way for a dedicated CEO.

Jung appointed as Executive Chairman

The company announced that Jung will continue to serve as Chairman and CEO during the recruitment process, and will assume her new title once the new CEO appointment is confirmed.

A committee comprising a board of directors will work together with Jung in the external recruitment process for the new CEO position, which Avon says has been created in an effort to streamline the executive board and in response to its growth.

Avon is due to announce it fourth quarter and full year results on February 14th. The results will be eagerly awaited by investors in view of the fact that the company has been the subject of speculation regarding financial take-over bids in light of deteriorating financial performance and the ongoing bribery investigations.

Related topics: Business & Financial

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