Corruption Probe Continues For Avon's China Operations

May 5, 2011 | Print | Email Email | Comments | Category: Business & Society, Law & Order

As part of claims made that its staff bribed government officials in China, U.S.-based cosmetics giant Avon says it is continuing its internal corruption investigation.

In connection with the company's internal investigation, certain personnel actions have now reportedly been taken, including the termination of four individuals previously placed on administrative leave in 2010. Both local media and the Wall Street Journal report that those four individuals are S.K. Kao, general manager of Avon's China operations; Jimmy Beh, the company's chief financial officer in China; C.Q. Sun, head of corporate affairs in China; and Ian Rossetter, Avon's global internal audit and security chief.

The company previously reported that it had engaged outside counsel to conduct an internal investigation and compliance review focused on compliance with the Foreign Corrupt Practices Act and related U.S. and foreign laws in China and additional countries. The internal investigation, which is reportedly being conducted under the oversight of Avon's audit committee, began in June 2008.

In 2008, Avon initially contacted the U.S. Securities and Exchange Commission and the United States Department of Justice to advise both agencies of its internal investigation.

Avon issued a statement in which it claims at this point it is unable to predict the duration, scope, or consequences of the internal investigation and compliance reviews on the company.

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