Tokyo - A Panasonic inflight entertainment and
communications systems subsidiary is under investigation by US authorities for
allegedly breaking bribery and securities laws.
Panasonic Avionics is being probed by the US
Department of Justice and Securities and Securities Exchange Commission
for violating the Foreign Corrupt Practices Act, the Osaka-based company
said in a statement Thursday. Panasonic said it’s cooperating with the
agencies, and evaluating the potential financial impact of the probe.
The announcement of the probe mars an otherwise positive
earnings release for Panasonic, which raised its full-year profit and revenue
forecasts. The subsidiary is part of a corporate division that also makes
mobile phones, projectors and surveillance cameras with a total of 33,000
employees. The segment had 751.5 billion yen ($6.7 billion) in sales in the
nine months ended Dec. 31, or 14 percent of total revenue.
In a separate release, Panasonic said CEO Paul
Margis left Panasonic Avionics and was succeeded by Hideo Nakano, formerly
deputy CEO. The company also replaced the chief financial officer of the unit,
and appointed a new chief operating officer.
The avionics company, founded in 1979, is among the top
suppliers of seat-back entertainment systems for airline passengers, and also
makes communications systems including Wi-Fi access in planes. It’s based in
Lake Forest, California, and has more than 4 500 employees.
The Wall Street Journal reported in April 2013 that the
unit was under a bribery investigation. Employees were asked to preserve
documents related to gifts or benefits offered to airline employees or
government officials, as well as any that reported rumours, concerns or
complaints of alleged bribery or corruption, the newspaper said, citing company
documents.
Panasonic, the parent company, increased its net income
outlook 8.3 percent to 130 billion yen for the period ending March 31, citing
weakening yen. Operating income will total 265 billion yen on 7.35 trillion yen
in sales, it said.
Panasonic’s shares closed 1.4 percent lower at 1,169 yen
in Tokyo before the announcement. The stock was little changed in German
trading.