Mondelez International has confirmed it continues to co-operate with a US Securities and Exchange Commission investigation into allegations of corruption at a unit in India as reports surface the US regulator could launch civil action against the Dairy Milk maker.
According to a report in The Wall Street Journal, citing unnamed sources, the SEC is preparing to file civil charges against Mondelez. The investigation is probing payments allegedly made to Indian officials by Cadbury in 2011 to secure factory approvals and permits. This allegedly enabled the company to claim a tax exemption valued at more than US$90m.
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A spokesperson for the company told just-food: "We don’t have anything new to share. We’re continuing to co-operate with the US government in their investigation."
Mondelez is also in the process of appealing a $92m tax bill in India related to an alleged "phantom factory".
The company has been accused of providing "inaccurate information when claiming an excise tax exemption" for a Cadbury factory in Himachal Pradesh. A plant expansion was completed in 2009. India’s authorities have claimed the expansion was portrayed as a new facility, and therefore eligible for a tax exemption, rather than an enlargement of an older factory. As such, Mondelez is alleged to have sought tax benefits for what has been labelled in reports as a "phantom factory" that did not officially exist.
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On this matter, the spokesperson confirmed Mondelez continues to appeal the local authorities findings. "Regarding the Indian excise tax dispute, we appealed the Commissioner’s order in June. We believe the decision to claim the excise tax benefit is valid and we are continuing to contest the show cause notices through the administrative and judicial process," the spokesperson said.
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