Panasonic says its avionics business being probed by US authorities

Tokyo: Panasonic Corp. said on Thursday its avionics unit is being investigated by US authorities under the Foreign Corrupt Practices Act (FCPA) and that it has recently begun talks with US officials to resolve the matter.

In a stock exchange filing, the Japanese electronics maker said Panasonic Avionics Corp., a major supplier of in-flight entertainment systems, is being probed by the Department of Justice (DoJ) and the Securities and Exchange Commission (SEC).

Panasonic did not specify the nature of the investigation.

“Panasonic has been cooperating with the authorities, and has recently engaged in discussions with the DoJ and SEC with a view towards resolving the matter,” it said.

The Wall Street Journal reported in March 2013 that US authorities were investigating whether Panasonic Avionics paid bribes overseas to airline employees or government officials to help land business.

Panasonic declined to comment on whether the current discussions are related to that investigation.

In a separate statement, the company said it was immediately replacing the unit’s chief executive Paul Margis, who has headed the company since 2005, with his deputy Hideo Nakano.

At a results briefing, Panasonic’s senior managing director Hideaki Kawai declined to give a reason for the change of CEO at Panasonic Avionics.

Reuters attempted to contact Margis for comment via Facebook but had no immediate response.

Panasonic Avionics is headquartered in California with over 4,500 employees globally. In addition to in-flight entertainment, it supplies communications equipment to airlines.

The Foreign Corrupt Practices Act is an anti-bribery law that bans companies from making payments to foreign government officials to secure business.

Separately, Panasonic raised its full-year operating profit outlook on Thursday as it benefited from a weaker yen that has boosted the value of earnings repatriated from overseas.

It forecast group profit of 265 billion yen ($2.35 billion) for the year ending 31 March, up from a previous estimate of 245 billion yen under international financial reporting standards (IFRS). Reuters