Herbalife has agreed to pay about $123m to resolve claims from US authorities alleging that the nutritional supplement group paid bribes to advance its business in China.

The Department of Justice accused Herbalife of bribing Chinese officials, including in government agencies, in order to obtain direct selling licenses, influence government investigations and remove negative reports in state-controlled media. The alleged misconduct was said to have occurred between 2007 and 2016.

The DoJ said on Friday that it reached a deferred-prosecution agreement with Herbalife to resolve a count of conspiracy to violate the US Foreign Corrupt Practices Act (FCPA), a federal anti-bribery statute. Herbalife agreed to pay a criminal fine of more than $55m in addition to admitting criminal conduct, according to the DoJ.

“By engaging in a decade-long scheme to falsify its books and records to conceal corrupt and other improper payments to Chinese officials and state-owned entities, Herbalife misrepresented important information made available to investors,” said Brian Rabbitt, acting assistant attorney-general for the DoJ’s criminal division.

In a related action, the Securities and Exchange Commission said Herbalife would pay more than $67m to settle claims that it violated accounting provisions of the FCPA. The company’s subsidiaries in China made payments and provided other benefits, including meals and gifts, to Chinese officials to boost their businesses, the SEC said.

The company’s settlement with the SEC requires that Herbalife report on the status of its remediation and compliance measures for three years.

“As previously disclosed, the company conducted its own review and implemented remedial and improvement measures based upon this review, including but not limited to replacement of certain employees and enhancements of company policies and procedures in China,” Herbalife said in a filing with the SEC. “The company co-operated with the SEC and DOJ and has now reached separate resolutions with each of them.”

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A company spokesperson did not immediately respond to a request for comment.

In November, US authorities filed charges against two former executives of Herbalife China for allegedly taking part in a bribery scheme.

Shares in Herbalife, a multilevel marketing company that sells dietary and nutritional products, were down more than 2 per cent. The stock was briefly halted after initially dropping 13 per cent after the case was first reported.

Herbalife gained widespread attention when activist investor Bill Ackman made a $1bn bet against the stock in 2012, accusing the company of being a “pyramid scheme”. Mr Ackman’s Pershing Square ended the money-losing short position — which pitted him against fellow activist Carl Icahn — about five years later.

Via Financial Times