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 | Investigations Dataset

Stanford Foreign Corrupt Practices Act Clearinghouse a Collaboration with Sullivan & Cromwell LLP

Investigations Dataset

 
Investigation into ABB's Activities in Italy Before 2007 · ABB Ltd.

Information & Summary

Investigation into ABB's Activities in Italy Before 2007

Related FCPA Matter:   ABB's Involvement in Mexico and in the United Nations Oil-for-Food Program between 1997 and 2004 Information

Information & Summary

Investigation Name:    Investigation into ABB's Activities in Italy Before 2007

Trend:    None

Type of investigation:    Internal, SEC, DOJ

Other Agencies Investigating/Assisting with SEC/DOJ Investigation:   

  • Italian Public Prosecutor

Whistleblower:    Unknown

Summary

ABB Ltd is a Swedish–Swiss multinational corporation headquartered in Zürich, Switzerland and is organized under the laws of Switzerland. It operates mainly in robotics, power, heavy electrical equipment, and automation technology areas.

As disclosed in its March 10, 2009, 20-F filing, in June 2004, ABB Ltd. disclosed to the SEC and the Italian authorities the preliminary results of an internal inquiry conducted with the assistance of outside counsel and forensic accountants. Those results showed that from the first quarter of 1998 through the first quarter of 2004, the medium voltage business of ABB’s Power Products division overstated its earnings before interest and taxes (operating income) and net income through the early recognition of certain revenue from incomplete projects, improper capitalization of costs on certain projects, unrecorded liabilities and borrowings, and other improper journal entries. As a result, the financial statements and certain financial data were restated in September 2004. The inquiry also uncovered improper payments to an employee of an Italian power generation company. ABB reported this matter to the Italian authorities, who initiated formal criminal proceedings, as well as to the SEC and the DOJ.

This investigation appears to have been subsumed into the resolution of other investigations into ABB.

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