US SEC set to bring a civil suit against Mondelez in Cadbury India probe

The US Securities and Exchange Commission (SEC) is all set to start up a civil lawsuit against Mondelez International over allegations of paying bribes by its Cadbury India unit to obtain factory permits and approvals.

Under the Foreign Corrupt Practices Act, the company may not face any criminal charges as no proof has emerged that links these payments to the parent company in the US, reported the Wall Street Journal.

While criminal charges may be unsuitable, prosecutors have not ruled out any other charges against the firm.

According to the 2011 internal report, the company’s Indian unit bribed government officials through a consultant to obtain approvals and permits for its plant in Baddi, which is located in an industrial town in the northern part of India. This also helped the unit in availing tax exemption of more than $90m.

The report stated that Cadbury also paid fees between May 2008 and October 2010 to eight more consultants "for which the only reasonable explanation is that they have been used to mask payments to government officials."

The company did not reveal the findings to the regulatory authorities. However, earlier this year, a whistleblower provided this information to the SEC and the US Justice Department.

A Mondelez spokesman was quoted by the publication as saying it did not reveal the internal report as it was covered by attorney-client privilege.

However, a senior SEC officials stated that though the report was privileged, they still did have sufficient evidence to bring forward a civil suit against Mondelez.

A Mondelez spokesman said that it is cooperating in the investigations.

The snack food and beverage company has a presence in approximately 165 countries, with operations in Asia Pacific, Africa, Europe, and America.

Its portfolio comprises around 58 brands, such as Oreo biscuits, Cadbury Dairy Milk, Trident gum, and Tang powdered drinks.