WASHINGTON (Reuters) - German insurer Allianz SE has agreed to pay $12.4 million to resolve charges it violated a U.S. foreign bribery law, the U.S. Securities and Exchange Commission said on Monday.
The SEC said Allianz violated the Foreign Corrupt Practices Act (FCPA) with improper records of payments to government officials in Indonesia during a seven-year period.
Regulators said the violations occurred from 2001 to 2008. Allianz later delisted from the New York Stock Exchange, but the SEC charged the insurer for violations that occurred while it was still under U.S. oversight.
Allianz neither admitted nor denied the findings, the SEC said.
Allianz spokesman Michael Matern said the company had investigated the matter and updated its anti-corruption policies as a result, including updating its third-party contracts and enhancing its due diligence process.
The SEC said it found that improper payments by a subsidiary in Indonesia of more than $650,000 to employees of state-owned groups helped Allianz obtain 295 insurance contracts on large government projects.
“Allianz’s subsidiary created an ‘off-the-books’ account that served as a slush fund for bribe payments to foreign officials to win insurance contracts worth several million dollars,” Kara Brockmeyer, who leads the FCPA unit of the SEC’s enforcement division, said in a statement.
In 2005, an audit found that managers in Indonesia were using special accounts to pay off government officials. A second complaint in 2009 showed that Allianz did not properly account for some payments in its books.
The payments contributed to more than $5.3 million in profits, the SEC said.
The U.S. Justice Department dropped a related inquiry earlier this year without bringing charges against the company.
Reporting By Emily Stephenson, additional reporting by Aruna Viswanatha; Editing by Maureen Bavdek and Nick Zieminski