Avon Products Inc. has fired four employees in connection with its ongoing bribery probe in China and additional countries.
This story first appeared in the May 5, 2011 issue of WWD. Subscribe Today.
They are S.K. Kao, the former general manager for China; C.Q. Sun, the former head of corporate affairs for China; Jimmy Beh, the former head of finance for China; and Ian Rossetter, the former head of global internal audit and security, who was previously head of finance for Asia-Pacific.
Last year, they had been placed on administrative leave, pending an internal investigation.
In an SEC filing released Tuesday, Avon stated, “Pending the outcome of the internal investigation and compliance reviews, additional personnel actions may be taken in the future.”
The investigation into alleged bribery, which began nearly three years ago, in June 2008, is being conducted under the oversight of Avon’s audit committee. Information that alleged that Avon executives in China bribed Chinese government officials came to Andrea Jung, Avon’s chairman and chief executive officer, in the form of a letter. In October of 2008, Avon contacted the United States Securities and Exchange Commission and the U.S. Department of Justice about the investigation. Avon has previously said the investigation, which started in China but has since expanded, is focused on reviewing certain expenses and books and records processes, including travel, entertainment, gifts and payment to third-party agents and others, in connection with its business dealings, directly or indirectly with foreign governments and their employees.
On Tuesday, Avon stated, “The internal investigation and compliance reviews of these matters are ongoing, and we continue to cooperate with both agencies with respect to these matters.…At this point we are unable to predict the duration, scope, developments in, results of, or consequences of the internal investigation and compliance reviews.”
Despite Avon’s voluntary actions to dig into the allegations, one Wall Street source said last year, “It’s an embarrassment.”