Mercedes maker settles bribe case for $185 million

by Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- The maker of Mercedes-Benz vehicles agreed to a $185 million settlement of allegations that it paid bribes to win contracts on three continents, the U.S. government said Thursday.

The Securities and Exchange Commission accused Stuttgart, Germany-based Daimler AG (DAI) of paying at least $56 million in bribes to foreign government officials to secure business in Asia, Africa, Eastern Europe and the Middle East over a 10-year period.

The automaker earned $1.9 billion in revenue and $90 million in profit from the illegal deals, the SEC said.

The SEC said Daimler AG agreed to the settlement, which was approved by a U.S. judge on Thursday, without admitting or denying the bribery charges. Daimler will pay $93.6 million in fines and give up $91.4 million in profit, according to the commission.

"It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement. "The financial and reputational costs incurred by Daimler as a result are a lesson that should be studied closely by all companies."

The SEC began investigating bribe charges against Daimler in 2004.

Daimler responded to the announcement with a press release announcing remedial measures bolstering the company's compliance department and training programs.

"We have learnt a lot from past experience. Today, we are a better and stronger company, and we will continue to do everything we can to maintain the highest compliance standards," Dr. Dieter Zetsche, Daimler AG chairman said in a statement.

In December, another German company, engineering giant Siemens AG, agreed to pay a record $1.6 billion in fines to American and European authorities after being investigated for bribes. To top of page

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