On January 6, Cadbury Limited and its parent company Mondelez International, Inc. (formerly known as Kraft Foods Inc.), agreed to pay $13 million to settle the SEC’s allegations related to an agent’s interactions with Indian officials regarding a chocolate factory in India. The charges relate to payments made by Cadbury’s India unit in 2010 to a local agent who provided consultation services and dealt with Indian governmental officials to obtain clearances and licenses to increase production at Cadbury’s Baddi plant. The SEC alleged, and Cadbury and Mondelez neither admitted nor denied, that Cadbury violated the books and records and internal controls provisions of the FCPA.
According to the SEC, Cadbury failed to perform appropriate due diligence on the agent and to monitor the agent’s actions, creating a risk that payments could be used for improper purposes. While the agent submitted invoices claiming that he prepared various license applications, the SEC claimed that these license applications were actually prepared by other Cadbury employees. The SEC noted in its decision that Mondelez had completed its own internal investigation that led to Cadbury ending its relationship with the agent and that Mondelez both cooperated with the SEC’s investigation and undertook “extensive remedial actions with respect to Cadbury.”