Johnson Controls, a diversified technology and industrial services provider, disclosed last week in a Form 10-Q filing with the Securities and Exchange Commission that it is investigating potential violations of the Foreign Corrupt Practices Act with respect to its operations in China.
The FCPA allegations are isolated to Johnson Controls marine business in China and date back to 2007, with annual sales during this period ranging from $20 million to $50 million, the company stated in a May 2 securities filing. No further details were provided on the matter.
Under the oversight of its audit committee and board of directors, the company initiated an investigation into this matter with the assistance of external legal counsel and external forensic accountants. In June 2013, Johnson Controls self-reported the findings to the SEC and Justice Department. Last week's securities filing, however, marks the first time the company has disclosed the matter.
Johnson Controls said it continues to “fully cooperate” with the SEC and Justice Department in the matter but is “unable to predict the ultimate resolution of this matter with these agencies.”
Johnson Controls added that it's also making, and continues to evaluate, certain enhancements to its FCPA compliance program in connection with this investigation.
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