Standard Chartered PLC is being probed by the U.S. Justice Department over allegations that Maxpower Group Pte. Ltd., a power-plant builder based in Indonesia and controlled by the London-based bank, paid bribes to Indonesian government officials and others from at least 2012 to late 2015, either to win contracts or get paid on time, reports the Wall Street Journal.
The probe is focusing on whether U.S. anticorruption rules were broken, according to the Journal. The Foreign Corrupt Practices Act prohibits U.S. companies or those doing business in the U.S. from making payments or giving gifts to foreign officials in exchange for business, whether directly or through intermediaries.
The Journal reports that an internal audit indicated that more than $750,000 in outstanding cash advances in 2014 and early 2015 needed to be examined as possible bribes, finding which were echoed by Lawyers at Sidley Austin LLP hired to review the audit. The review found that some of the payments were funded by cash advances requested by three founders and two employees, says the Journal.
The Justice Department is investigating whether Standard Chartered executives on the Maxpower board knew about or approved alleged bribes, and if the bank’s controls around its investment in Maxpower were adequate, the Journal’s sources said.
Standard Chartered bought a stake in Maxpower in 2012 and became majority shareholder last year through a cash infusion of $60 million, bringing its total investment to $143 million.