Avon puts 4 on leave after graft allegations
By Li Xinran |
April 15, 2010, Thursday
|
Print Edition
Print Edition
BEAUTY and cosmetics giant Avon Products Inc has confirmed that four senior executives have been put on leave pending internal investigations into bribery allegations at its China unit.
The four have been asked to take administrative leave of absence, according to a statement by Victor Beaudet, Avon's vice corporate communications president.
The executives suspended were named as S.K. Kao, general manager of Avon China, Jimmy Beh, a former finance head for Avon China and most recently in a sales development role in Malaysia, C.Q. Sun, head of corporate affairs for Avon China, and Ian Rossetter, most recently vice president of finance and tax.
Previously, Rossetter had been responsible for global internal auditing and was vice president of finance for Asia Pacific.
According to the statement, Avon carried out a voluntary internal investigation in June 2008 under the oversight of its audit committee and conducted by external counsel, of its China operations, focusing on compliance with the Foreign Corrupt Practices Act.
An insider told the Wall Street Journal that the investigation had broadened to include Latin America, another important market for New York-based Avon, and that the potential scale of alleged corruption had grown beyond its initial baseline of several million dollars.
The probe over an allegation of improper expenses for items such as travel and entertainment on behalf of Chinese officials with ties to Avon's business includes alleged purchases of trips to France, New York, Canada and Hawaii.
Avon shares ended Tuesday's trading down US$2.77, or 8 percent, at US$31.99 after falling as low as US$31.68.
The four have been asked to take administrative leave of absence, according to a statement by Victor Beaudet, Avon's vice corporate communications president.
The executives suspended were named as S.K. Kao, general manager of Avon China, Jimmy Beh, a former finance head for Avon China and most recently in a sales development role in Malaysia, C.Q. Sun, head of corporate affairs for Avon China, and Ian Rossetter, most recently vice president of finance and tax.
Previously, Rossetter had been responsible for global internal auditing and was vice president of finance for Asia Pacific.
According to the statement, Avon carried out a voluntary internal investigation in June 2008 under the oversight of its audit committee and conducted by external counsel, of its China operations, focusing on compliance with the Foreign Corrupt Practices Act.
An insider told the Wall Street Journal that the investigation had broadened to include Latin America, another important market for New York-based Avon, and that the potential scale of alleged corruption had grown beyond its initial baseline of several million dollars.
The probe over an allegation of improper expenses for items such as travel and entertainment on behalf of Chinese officials with ties to Avon's business includes alleged purchases of trips to France, New York, Canada and Hawaii.
Avon shares ended Tuesday's trading down US$2.77, or 8 percent, at US$31.99 after falling as low as US$31.68.
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