Entries in WW Grainger Inc. (3)
Industrial supplier W.W. Grainger, Inc. said last week the DOJ won't prosecute the company for giving pre-paid gift cards to some customers in China.
Gift-giving practices by employees in China have triggered an FCPA investigation, according to an SEC filing this week by WW Grainger Inc.
The Illinois-based industrial supply company said sales employees in China 'may have provided prepaid gift cards to certain customers.' Among Grainger's customers are government departments and agencies.
The company said it self reported the potential violations to the DOJ and SEC in late January. Its internal investigation isn't finished.
Grainger's 2011 revenues were $8 billion. It sells about a million products directly to business customers.
In China, Grainger operates from a distribution center in Shanghai and two small regional warehouses. It also has six sales offices in eastern China 'that allow sales representatives to work remotely and meet with customers,' it said.
WW Grainger Inc trades on the NYSE under the symbol GWW.
Grainger's FCPA disclosure in its Form 10-K (annual report) filed on February 28, 2012 for the period ending December 31, 2011 said:
The Company is conducting an inquiry into alleged falsification of expense accounts submitted by employees in certain sales offices of Grainger China LLC, a subsidiary of the Company. In the course of the investigation the Company learned that sales employees may have provided prepaid gift cards to certain customers. The extent and value of the gift cards are subject to further inquiry. The Company's investigation includes determining whether there were any violations of laws, including the U.S. Foreign Corrupt Practices Act. Consequently, on January 24, 2012, the Company contacted the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) to voluntarily disclose that the Company was conducting an internal investigation, and agreed to fully cooperate and update the DOJ and SEC periodically on further developments.
The Company has retained outside counsel to assist in its investigation of this matter. Because the investigation is on-going, the Company cannot predict at this time whether any regulatory action may be taken or any other potential consequences may result from this matter.