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1
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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMMISSION SETTLES PAYMENT BANADEX SECURITIES EXCHANGE COMMISSION BOOKS INTERNAL CONTROLS PROVISIONS CONSENT COLOMBIA EMPLOYEES ACCOUNTING FOREIGN CUSTOMS OFFICIALS ADMITTING DENYING ENTRY AUDIT TURBO COLOMBIA PORT FACILITY INSTALLMENT PAYMENTS INTERNAL AUDIT STAFF AUDIT REVIEW INTERNAL INVESTIGATION CORRECTIVE ACTION TERMINATING RESPONSIBLE BANADEX EMPLOYEES REINFORCING INTERNAL CONTROLS |
U.S. Securities and Exchange Commission
Washington, D.C.
Litigation Release No. 17169 / October 3, 2001
Accounting and Auditing Enforcement Release No. 1464
SEC v. Chiquita Brands International, Inc., Civ. Action No. 1 01CV02079
(D.D.C.)(filed October 3, 2001)
Sec Settles Case against Chiquita Brands International, Inc.
The Securities and Exchange Commission today issued a settled
cease-and-desist order against Chiquita Brands International, Inc. in
which the Commission finds that Chiquita violated the books and
records -- Section 13(b)(2)(A) -- and internal accounting controls --
Section 13(b)(2)(B) -- provisions of the Securities Exchange Act of
1934 in connection with a payment to foreign customs officials by a
wholly-owned foreign subsidiary of Chiquita. Without admitting or
denying the Commission's findings, Chiquita consented to the entry of
an order that requires Chiquita to cease and desist from violating
those provisions. The Commission also filed a settled complaint in
federal court seeking entry of a consent order requiring Chiquita to
pay a $100,000 civil penalty. Chiquita settled the action without
admitting or denying the Commission's allegations.
The order finds that Chiquita violated the books and records and
internal controls provisions as a result of the conduct of its
Colombian subsidiary, Banadex. According to the order, without the
knowledge or consent of any Chiquita employees outside Colombia and in
contravention of Chiquita's policies, employees of Banadex authorized
the payment of the equivalent of $30,000 to local customs officials to
secure renewal of a license at Banadex's Turbo, Colombia port
facility. The subsidiary's books and records incorrectly identified
the two installment payments, which were made in 1996 and 1997. In
1997, Chiquita's internal audit staff discovered the payment during an
audit review and, after an internal investigation, Chiquita took
corrective action which included terminating the responsible Banadex
employees and reinforcing internal controls at Banadex.
_________________________________________________________________
Modified 10/10/2001
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