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Monday
Dec172012

FCPA helps Avon's Jung make worst CEO list

Photo courtesy of Avon ProductsOn its list of the worst CEOs of 2012, Bloomberg Businessweek included Avon's Andrea Jung. Thanks in part to the FCPA.

Jung, left, ranked as the third worst CEO (behind Best Buy's Brian Dunn and Chesapeake Energy's Aubrey McClendon).

She stepped down as chief executive of Avon in April and leaves her chairman post at the end of the year.

Bloomberg Businessweek's story said 'Jung has been unable to fix the company’s operational problems, failed to groom a successor, and turned down a $10.7 billion offer from the beauty-care company Coty that, in retrospect, it should have leaped at. Since 2004, the company’s market value has fallen under her watch from $21 billion to $6 billion. And the company has had to spend $300 million in legal expenses related to allegations that it violated the Foreign Corrupt Practices Act, which bars bribery of foreign officials.'

In July, the Wall Street Journal reported that federal prosecutors wanted to speak to Jung. The company launched an internal investigation in 2008 linked to the payment of improper promotional expenses.

The 'specific reason for speaking to Ms. Jung couldn't be determined,' the Wall Street Journal said, 'and it is unclear when a meeting might take place. But [the DOJ's] interest shows their investigation is reaching the highest level of the door-to-door beauty company.'

A shareholder lawsuit filed earlier this year accused Avon of paying a big severance to a former head of internal audit in 2006 to buy his silence about bribes in China.

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