Kenya: advertising giant WPP to pay fine of 2 billion shillings in the United States

Kenya-based advertising giant WPP PLC to pay $ 19 million (2 billion shillings) to resolve US government claims it failed to adequately guard against corruption risks in India , China, Brazil and Peru, securities regulators said on Friday.

The American Securities and Exchange Commission (SEC) said that an Indian subsidiary of WPP paid up to $ 1 million (Sh110 million) in bribes to Indian officials through middlemen to obtain and maintain affairs of state, which resulted in approximately $ 5.7 million (Sh 627 million) in profits between 2015 and 2017.

The Kenyan unit of WPP operates under the name of WPP Scangroup. The Kenyan unit was not involved in the SEC investigation and was not named by the US regulator. The US regulator said the alleged wrongdoing violated the Foreign Corrupt Practices Act, a law that prohibits US-listed companies from paying money or anything of value to foreign officials to do business . WPP agreed to settle the SEC investigation without admitting or denying the allegations.

In China, a subsidiary in the midst of a tax audit avoided paying more than $ 3 million (Sh 330 million) in taxes to a Chinese tax authority by offering $ 2,000 (Sh 220,000) in gifts and entertainment to tax officials and earning more than $ 100,000 (Sh11 million) in payments to a vendor recommended by tax authorities before the audit was completed, the SEC said.

An employee of the WPP China subsidiary forged documents to justify supplier payments, regulators said.

Political campaign

The SEC also found that a subsidiary of WPP in Brazil made inappropriate payments to suppliers in connection with securing government contracts, while a subsidiary of WPP in Peru agreed to be an intermediary for the pots. -wine from a construction company in favor of the political campaign of the mayor of Lima.

The US regulator said the compliance gaps emerged when WPP implemented an aggressive growth strategy that involved buying small advertising companies in high-risk markets.

The founders of the acquired companies would often remain managing directors and have broad autonomy, the agency said.

Like other major advertising conglomerates, WPP – the largest in the world in terms of revenue – has grown largely through the buyout of agencies around the world.

WPP was quoted as saying it fired employees accused of wrongdoing and cooperated with the SEC investigation.

“The new management of WPP has put in place robust new compliance measures and controls,” the company said in a statement.

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