The renowned US agricultural and construction equipment titan, Deere, has consented to a substantial $10 million settlement following charges from the US Securities and Exchange Commission (SEC) that its Thai subsidiary engaged in bribery to secure business contracts. According to the SEC’s statement released Tuesday in Washington, the illicit activities involved offering extravagant gifts, such as massage parlour indulgences and opulent international trips, to sway government officials.
Wirtgen Thailand, a wholly owned subsidiary of Deere, perpetrated these offenses from late 2017 to 2020. The recipients of these unethical favors included officials from various state agencies such as the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads. Furthermore, bribes were also extended to a significant Thai construction company referred to in the SEC summary simply as “Company A”.
Despite Wirtgen Thailand’s code of conduct explicitly prohibiting any form of bribe, the SEC uncovered payments that violated the Foreign Corrupt Practices Act (FCPA) in the United States. These bribes, made between late 2017 and 2020, included cash, extravagant meals, fake consulting fees, scenic “factory visits” across Switzerland and other European nations, and massage parlour “entertainment”.
The SEC report even includes shocking text message exchanges between Wirtgen executives concerning bribes to the Department of Highways and the Department of Rural Roads. One eye-opening excerpt from April 2019, reveals Wirtgen Thailand’s Managing Director texting the company’s Finance Manager: “re DOH … will have candy money for you too, next week. … Re DRR I will have to discuss it again.” This conversation outlines the instructions to “Prepare 5 envelopes. And withdraw cash. You may take THB 100,000 first. For use on the delivery date.”
The imposed settlement comprises a civil fine of $4.5 million, the disgorgement of $4.34 million acquired through improper benefits, and $1.09 million in interest.
The SEC’s settlement mirrors Illinois-based Deere’s collaboration with the investigation, which included the termination of employees implicated in the misconduct, and significant enhancements in their compliance procedures and anti-bribery training. In a statement, Deere expressed, “These allegations represent a clear violation of our company policies and ethical standards. They are in direct conflict with our core values — particularly our commitment to integrity — and we strongly condemn such practices.”
Charles Cain, head of the FCPA unit at the SEC Enforcement Division, emphasized, “After acquiring Wirtgen Thailand in 2017, Deere failed to timely integrate it into its existing compliance and controls environment, resulting in these bribery schemes going unchecked for several years. This action serves as a stark reminder for corporations to promptly ensure newly acquired subsidiaries have all the necessary internal accounting control processes in place.”
Deere should face harsher penalties! A $10 million fine is nothing for a company of their size!
Agreed! These companies always get away with a slap on the wrist. The whole system is rigged!
It’s not just about the fine, though. Deere had to upgrade their compliance programs, which hopefully means better behavior in the future.
But who checks if they actually follow through? It’s easy to say they’ll improve, but actions speak louder.
Maybe instead of just fines, companies should face actual criminal charges. That would make a difference.
What’s crazy is the amount and types of gifts! Massage parlours and international trips? Unbelievable!
Honestly, that’s pretty standard in some countries. Corruption is rampant and gifts are just part of doing business.
But should we just accept that? It’s corrupt and it needs to be rooted out, not normalized.
True, but as long as humans are involved in trade and politics, corruption will never fully disappear.
Maybe, but that doesn’t mean we shouldn’t try to fight it. These companies have a lot of power and should be held to high standards.
I don’t understand why it’s such a big deal? So they gave some bribes. Who cares? It’s just the way business is done.
It’s a huge deal because it means some companies get unfair advantages. It’s not just about bribery, it’s about an even playing field.
Plus, it breaks trust. If public officials can be bought, how can we trust any of them?
So, what happens to the people who took the bribes? Are any Thai officials going to face consequences?
Not likely. The focus is always on the company giving the bribes, not the individuals receiving them.
Exactly. Corruption flows both ways, but the receivers often escape punishment.
This is why corporate governance is so important. Deere’s integration of Wirtgen was delayed, and look what happened.
Anyone who thinks this issue is going to go away anytime soon is dreaming. Corporate corruption is ingrained in the system.
True, but every step towards transparency counts. It’s a slow process but necessary.
A slow process that needs stronger regulations and more severe penalties to be effective.
Reading those text messages is like watching a crime drama. Can you imagine the arrogance?
Deere should have known better. They acquired Wirtgen in 2017 – that’s plenty of time to implement controls.
Totally. Just another example of corporate negligence disguised as a mistake.
Exactly! They got caught, and now they’re doing damage control. Classic.
Can someone explain how this will affect Deere’s stock prices?
Usually, these things cause a temporary drop, but long-term, as long as they improve compliance, it might bounce back.
Why isn’t the management of Wirtgen facing jail time? This is fraud at a high level.
It’s complicated. Usually, the company takes the fall, and individual accountability gets lost in the paperwork.
Doesn’t matter how big the name, corruption is corruption. Very disappointing to hear this from Deere.
What do you expect when capitalism is geared towards profit above all else? This is a symptom of the larger issue.
Absolutely spot on. The entire system needs a reboot.
Or maybe people should just follow the laws. Blaming capitalism is a cop-out.
I can’t believe these guys thought they could get away with this. Where’s the accountability?
Accountability? In this economy? Good luck.
Real accountability would mean prison sentences, not just fines.
Imagine how many other companies aren’t getting caught. This case is probably just the tip of the iceberg.
This really makes me worry about the integrity of international business. If Deere is doing it, who else is?