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SEC Prepares Civil Charges Against Mondelez in Cadbury Probe

U.S. securities regulators are preparing civil charges against snack-food maker Mondelez International Inc. in connection with a long-running investigation of payments its Cadbury unit made in India, said people familiar with the matter.

Mondelez is unlikely to face criminal bribery charges under the Foreign Corrupt Practices Act, which bars U.S. companies from bribing foreign officials, because no evidence has emerged connecting the suspicious payments to the U.S., one of these people said. Prosecutors haven’t ruled out other charges, the person said.

The civil charges planned by the Securities and Exchange Commission involve provisions of the law that require companies to maintain internal safeguards against bribery and to keep accurate books and records, according to the people familiar with the matter.

The parties are in settlement talks, these people said. Any deal could still fall apart.

A spokesman for Mondelez said the company is cooperating with the SEC probe, but declined to comment on any discussions with the agency.

As previously reported, the U.S. investigation is focused on Cadbury’s plant in Baddi, an industrial town in northern India. Kraft Foods Inc. acquired British candy maker Cadbury PLC in January 2010 in a deal valued at about $19 billion. Kraft changed its name to Mondelez in 2012 after spinning off its North American grocery business.

The company concluded in an internal report by its lawyers in 2011 that Cadbury had used a consultant to funnel bribes to Indian officials in return for factory approvals and permits, which ultimately allowed Cadbury to claim a tax exemption valued at more than $90 million, according to the report, which was reviewed by The Wall Street Journal.

The report says Cadbury also paid fees to eight other consultants from May 2008 to October 2010 “for which the only reasonable explanation is that they have been used to mask payments to government officials.”

The company didn’t disclose those findings to federal authorities who were...


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