The business world is often linked with dark practices such as bribery and hideous scandals, but some companies tend to cross the line while trying to earn greater profits.
While several companies worldwide have landed in trouble for their criminal activities, the 15 companies covered in this article made headlines for their large-scale corruption.
Airbus
Airbus, Europe’s largest aerospace multinational, was accused of one of the largest bribery scandals. Airbus admitted to paying considerable bribes to officials on an ‘endemic’ basis to secure high-paying contracts in 20 countries. Judges labeled this corruption ‘grave, pervasive, and pernicious’ during court assessments. The company was found guilty during trial and asked to pay a £3 billion penalty. It was the largest ever corporate fine imposed on any company for bribery charges.
Volkswagen
German automobile giant, Volkswagen, shocked the world with its ‘diesel dupe’ scam. It installed a ‘defeat device’ in many of its diesel cars in America that could detect when they’re being tested. The installed device would change its functioning to clear tests while returning to default mode once the test is over. This scandal cost Volkswagen approximately £31.3 billion.
Odebrecht
Odebrecht is a construction giant famous in Latin America that has built numerous crucial infrastructure projects such as ports, metros, stadiums, etc. Trouble mounted on Odebrecht when it was caught in Brazil’s corruption probe called Operacao Lava Jato.
The company paid politicians and officials bribes for large contracts with Petrobras. Odebrecht paid bribes to land deals in Brazil, Argentina, Venezuela, Ecuador, Colombia, Peru, and numerous other countries. It was also accused of illegally funding some Brazilian politicians. The company agreed to pay a hefty fine of £2.6 billion during its judicial trials.
Siemens
Siemens enjoyed a good global reputation for being one of the world’s largest engineering companies that provided high-quality technological products and services in multiple domains. However, Siemens organized the biggest corruption crime of its time. According to the Security Exchange Commission (SEC), Siemens gave over $1.4 billion in bribes to government officials in America, the Middle East, Asia, Europe, and Africa. This scandal eroded peoples’ trust in Siemens and also attracted a hefty penalty and a fine of $1.6 billion.
Enron
Enron was a leading energy, commodities, and services company of its time but was dragged into bankruptcy because of its scandals. The company started using a technique called ‘mark-to-market accounting’ that allowed them to write unrealized future gains from upcoming contracts into current income statements, creating an illusion of higher profits. It even abused special purpose entities (SPE) by dumping its troubled assets into them. It was one of America’s biggest scandals in history, and it ended with a filing for Chapter 11 bankruptcy protection.
Semlex
Semlex, a Brussels-based passport printing company operating in several African countries, was accused of grave corruption charges. It entered a deal with the Congolese government to provide passports for its citizens. After securing the contract, Semlex started charging exorbitant charges for passports, a portion of which was sent abroad to a Gulf company owned by a DRC politician’s close relative. A Reuters investigation revealed that Semlex promised to produce passports at $50/passport, but it eventually started charging citizens $120/passport after securing the deal. Bribery charges are also imposed on Semlex, in addition to corruption and money laundering charges.
Lehman Brothers
Lehman Brothers was found guilty of organizing the largest accounting fraud in history. They took advantage of a loophole existing in the accounting standard language about repurchase agreements and used it to temporarily remove debts of over $50 billion from their balance sheet. The scandal was exposed when they filed for bankruptcy, sending shockwaves across the global financial world.
Petrobras
Petrobras is a state-owned oil company based in Brazil that was involved in one of Brazil’s most prominent corruption cases. The scandal came out in public in 2014 and highlighted how construction firms were overcharging Petrobras for contracts, only to funnel back the money to Brazilian politicians and executives. Several high-ranking officials were involved in this scam, exposing the country’s systematic corruption prevalent in political and corporate sectors. Besides losing investors’ trust, the company faced billions in losses after exposure.
Walmart
Walmart is a popular retail giant in America with a good reputation. However, its reputation was dented after getting accused for gross Foreign Corrupt Practices Act (FCPA) violations and paying bribes for international business expansion. Walmart was guilty of enabling third parties in foreign countries like India, Brazil, and China to make payments to government officials without ensuring they comply with FCPA. Besides damaged reputation, Walmart also faced financial losses by paying $282 million to settle the charges.
Kraft Heinz Company
The popular American multinational food company, Kraft Heinz, was guilty of conducting a massive accounting scam. Kraft Heinz overstated profits by improperly recognizing cost savings and manipulating supplier agreements. This practice harmed investors, who eventually had to bear the cost and burden of restatements and delayed financial reporting. This accounting scam resulted in a $62 million fine.
Glencore
Glencore, the popular Swiss multinational commodity trading and mining company, made headlines for orchestrating one of the biggest corruption scams in history.
The company is involved in high-profile bribery cases where it accepted to pay approximately $29 million in bribes to acquire special oil deals in five African countries. It is also facing trouble for its LSE prospectus scam, with 200+ global funds seeking damages. Glencore has paid $1.3 billion in international financial penalties to settle bribery charges.
Teva Pharmaceuticals
Teva Pharmaceuticals is one of the leading generic drug makers in America, and it organized a hideous price-fixing scheme to boost its profits. It allegedly partnered with its competitors to artificially inflate prices, suppress competition for specific drugs, and allocate markets.
This scandal leads to higher healthcare costs for consumers and governments. The company paid a criminal penalty of $225 million while admitting to conspiring with three generic drug makers to facilitate a price-fixing scandal.
