Beam Inc., n/k/a Beam Suntory Inc. was a Delaware corporation headquartered in Illinois that made and sold alcoholic beverages around the world. Beam's securities were publicly traded on the New York Stock Exchange until April 2014 when the company was acquired by Suntory Holdings Limited, a Japanese corporation. Beam subsequently delisted from the NYSE and continued operations as a Suntory Holdings subsidiary.
Beam Global Spirts & Wine (India) Private Limited ("Beam India") was acquired in 2006, and its books and records were consolidated into Beam’s books and records.
According to the documents in this case, from about 2006 to 2012, Beam, through Beam India, sold liquor products in six markets where the Indian state government regulated both the distribution and retail sale of alcoholic products as well as to the Indian military's Canteen Stores Department. Beam India used third-party promoters to market its products in those Indian states. The third-party promoters, in turn and with Beam India’s authorization, made improper payments to government officials at retail stores, depots, and various government offices to increase sales orders, get better positioning on store shelves, process and secure license and label registrations, and facilitate the distribution of Beam India’s spirit products from its bottling facility to warehouses in other states. The third-party promoters made improper payments of approximately $2 million in connection with sales in at least one state and to the Canteen Stores Department. Additionally, in 2011, Beam sought to introduce a new product in India. After delays in obtaining the label registration for the product, the Indian excise official with the discretion to issue the registration solicited a payment of one million Rupees (approximately his yearly salary or $18,000) to approve the registration, which Beam India's third-party bottler paid and Beam reimbursed. During this time, all these payments were mischaracterized on Beam India's books and records.
In a settled administrative proceeding filed on July 2, 2018, the SEC issued a cease and desist order against Beam. Under the terms of the settlement, the SEC ordered Beam to cease and desist violations of the books and records and internal controls provisions of the FCPA and ordered the company to pay over $8.1 million in disgorgement, interest, and monetary penalties. The SEC noted Beam's voluntary disclosure of the misconduct as well as the company's cooperation and remedial efforts.
In a related proceeding, on October 21, 2020, the DOJ filed a single count Information in the Northern District of Illinois against Beam alleging a conspiracy to violate the anti-bribery, books and records, and internal controls provisions of the FCPA. On October 23, 2020, the company entered into a deferred prosecution agreement with the DOJ. Under the terms of the settlement, Beam agreed to pay a criminal fine of $19,572,885, which represented a 10% reduction off the bottom end of the U.S. Sentencing Guidelines range, and to self-report on the status of the company's enhanced anti-corruption compliance policies and procedures to the DOJ for a term of three years. The DOJ noted Beam's partial cooperation and remediation, but the company received no credit for voluntarily disclosing the misconduct because it first came to the attention of the agency by way of an email from a former Beam employee. The DOJ also noted the parallel enforcement action brought in 2018 by the SEC but the DOJ did not credit any portion of the penalty paid to the SEC because Beam did not seek to coordinate a parallel resolution with the department.
