WPP has agreed to pay a $US19 million ($A26 million) fine to America’s Securities and Exchange Commission (SEC) relating to bribery allegations and accounting controls for its subsidiaries in Brazil, China, India and Peru.
The offences pre-date the current management headed by CEO Mark Read, with some dating as far back as 2013. Sir Martin Sorrell, who lead the company at the time, has not commented on the charges.
The world’s largest media company did not admit or deny allegations that it violated provisions of the Foreign Corrupt Practices Act but agreed to pay the penalty all the same.
In total, the fine comprises $10.1 million ($A13.9 million) in disgorgement, $1.1 million ($A1.5 million) in prejudgment interest and an $8 million ($A11 million) penalty.
SEC found that WPP failed to ensure that its overseas subsidiaries it had acquired implemented its internal accounting controls and compliance policies.
In its findings, SEC said WPP “implemented an aggressive business growth strategy” which failed to ensure local advertising agencies met its own accounting standards.
It added: “The order finds that WPP failed to ensure that these subsidiaries implemented WPP’s internal accounting controls and compliance policies, instead allowing the founders and CEOs of the acquired entities to exercise wide autonomy and outsized influence.”
For its part, WPP has said it has since changed its business practices.
In a statement, the company said: “As the Commission’s Order recognises, WPP’s new leadership has put in place robust new compliance measures and controls, fundamentally changed its approach to acquisitions, cooperated fully with the Commission and terminated those involved in misconduct.”
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