Cisco Systems Discloses Possible Embezzlement Scheme at Its China Operations
18 Feb 2021

Cisco Systems Inc. is investigating an alleged embezzlement scheme by former employees in China that may have involved payments to Chinese state-owned firms, the company said.

The networking-equipment firm voluntarily disclosed the matter to the U.S. Department of Justice and U.S. Securities and Exchange Commission, Cisco said in a 10-Q filing to the SEC on Tuesday.

The San Jose, Calif.-based company said the investigation was focused on allegations of a “self-enrichment” scheme involving employees in China who have since left the company. Some of the employees are alleged to have made payments to various third parties, including employees of state-owned enterprises, Cisco said.

The U.S. Foreign Corrupt Practices Act, an antibribery law, prohibits U.S.-linked companies from making payments to foreign public officials to obtain any business advantage. Under the law, public officials can include employees of state-owned enterprises, which are prevalent in China.

By Dylan Tokar, The Wall Street Journal, 17 February 2021

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