In the Matter of Anheuser-Busch InBev SA/NV (2016)

• Case Name
• In the Matter of Anheuser-Busch InBev SA/NV (2016)

• Date Filed
• 09/28/2016

• Enforcement Agency
• SEC

• Countries
• India

• Foreign Official
• Unnamed Indian government officials.

• Date of Conduct
• 2009 to 2012

• Nature of Business
• Anheuser Busch InBev, a global brewer, is a Belgian company headquartered in Leuven, Belgium.  AB InBev’s American Depository Receipts trade on the New York Stock Exchange and are registered with the SEC pursuant to Section 12(b) of the Securities Exchange Act.  AB InBev maintains operations in India through its wholly owned subsidiary, Crown Beers India Private Limited (“Crown”).

• Influence to be Obtained
• According to the SEC, from 2009 until 2012, AB InBev held a 49% interest in an Indian joint-venture called InBev India International Private Limited (“IIIPL”) that was managed by Crown.  During this period, IIIPL allegedly invoiced Crown for reimbursement of certain promotional expenses without proper documentation, but Crown paid the invoices nevertheless as legitimate promotional expenses.  The SEC claims that IIIPL then funneled the money generated by this scheme to third-party sales promoters, who made improper payments to Indian government officials in exchange for beer orders and regulatory advantages.
  
  The SEC also alleges that Crown and AB InBev were notified of IIIPL’s improper conduct, but failed to adequately address the allegations and, in some cases, actively obstructed the Commission’s investigation.  In one instance, the SEC asserts that Crown terminated a local whistleblower and entered into a separation agreement with the employee that prevented the employee from disclosing any information concerning the improper conduct at IIIPL to the SEC.

• Enforcement
• On September 28, 2016, the SEC announced that it had settled an enforcement action against AB InBev for violations of the FCPA’s books-and-records and internal controls provisions.  The SEC also alleged that AB InBev violated Rule 21F-17(a) of the Exchange Act because the separation agreement entered into between the local whistleblower and Crown impeded the employee from communicating with the SEC regarding possible violations of securities laws.  According to the cease-and-desist order, AB InBev agreed to pay a total sanction of $6,008,291.  The DOJ separately informed the company that it would not pursue an enforcement action.

• Amount of the Value
• Not Stated

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• Joint Venture; Sales Agent/Consultant.

• Citizenship of Parent Entity
• Belgium

• Total Sanction
• $ 6,008,291

• Compliance Monitor
• No

• Reporting Requirements
• Yes (2 Years)

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 6,008,291

Anheuser-Busch InBev SA/NV

• Citation
• In the Matter of Anheuser-Busch InBev SA/NV, Admin. Proc. File No. 3-17586 (Sept. 28, 2016).

• Date Filed
• 09/28/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• Exchange Act Rule 21F-17(a).

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• Belgium