Avon eager to settle ongoing bribery probe

By Andrew MCDOUGALL contact

- Last updated on GMT

Avon eager to settle ongoing bribery probe

Related tags: U.s. securities and exchange commission

Avon Products is in advanced talks with federal authorities in a bid to settle a long-running bribery probe and boost its global performance.

The case, regarding the company’s alleged bribery in China and other markets, has been ongoing for a couple of years and only last November, the global cosmetics firm announced concern that its business could be affected by the Securities and Exchange Commission's recent proposal​ of a much larger penalty to settle bribery allegations than it had initially expected.

Avon wants to settle a long-running bribery probe that has dogged the company for years and could cost tens of millions of dollars to resolve, according to various media reports.

Eager to settle

The U.S firm is said to be eager to come to terms and is trying to reach a deal with the Justice Department and SEC before it reports earnings today.

According to Bloomberg, Avon could resolve the probe through a so-called deferred-prosecution agreement, with prosecutors filing charges and putting them on hold if the company makes payments and changes required by the government.

The whole case relates to ongoing investigations into whether Avon breached the U.S. anti-bribery law by providing gifts or making payments to officials in China and other countries, which began in 2008.

Ongoing investigation

Back in January 2012 this led to the company announcing that its vice chairman Charles Cramb was fired following the ongoing investigations into bribery​, in its SEC filing.

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.

In its last financial announcement for the first nine months of 2013​, Avon's profit declined 89% to $12.7m, on a 4% drop in revenues to $7.3bn, with company CEO Sheri McCoy commenting that it was a ‘tough’ quarter.

As part of cost-saving initiatives aimed at turning the company’s fortunes around, Avon also announced it was cutting a further 650 jobs​, last December.

Related topics: Business & Financial

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