Europe’s largest insurance company, Germany-based Allianz SE, apparently is about to limit damages sustained by United States Securities and Exchange Commission (SEC) investigations.
The insurer had been under US investigation for its possible involvement in two major bribe cases.
The first case began after allegations gave rise to suspicion that Allianz employees were involved in bribe payments at a joint venture company in Indonesia. Apparently the payments were made with the intention of being awarded contracts related to the insurance of major infrastructure projects. To avoid charges for violating the Foreign Corrupt Practices Act (FCPA) Allianz is expected to agree to pay fines in the range of $ 7-10 millions to settle the case. While there was no statement from SEC an Allianz spokesman confirmed settlement negotiations regarding the matter.
The second case that directed SEC’s attention towards Allianz became public in September 2010. Allianz holds the majority of the shares in manroland AG, the world’s second largest printing press manufacturer, while about 25 % of the shares are being held by MAN AG – a German engineering company which was incidentally involved in legal proceedings because of accusations of corruption itself. Manroland officials came under suspicion of having authorized bribe payments through a Swiss subsidiary. The incident transpired when internal examinations revealed payments were made without duly documentation. Since the destination of the payments has not been determined yet, German prosecutors are investigating for tax offenses.
Although Allianz itself is not under investigation in Germany, SEC scrutinized the events, showing the recent tendency of the agency to pay particular attention to holding foreign investors responsible for corruption at controlled companies.
However according to people involved in the process SEC does not intend to charge Allianz for the incidents involving manroland AG – in what might have been a policy-making case, which would have been of particular interest for future proceedings. For the first time SEC instigated investigations against a foreign company for conduct at companies it has majority stakes in. Also the controversial questions of the case regarding the range of competence of SEC will remain unanswered. Concerning this matter the case would have been particularly instructive for prospective proceedings since the agency claimed jurisdiction over Allianz SE despite the fact the insurer was listed on NYSE only until 2009.
Among others one reason for refraining from pressing charges allegedly were difficulties SEC experienced in trying to obtain incriminating documents since German corporate and data protection law impedes the enforcement of their surrendering.
