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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