ANOTHER SCANDAL: US tyre company fined sh1.5 billion for bribing several Kenyan government agencies

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Hot in the heels of Chicken gate scandal where a British ballot printing company Smith and Ouzman paid IEBC officials millions to get tenders, another multi-billion scandal involving a US company and several Kenyan government agencies including the disciplined forces has sufficed. Goodyear Tyre & Rubber Company has been fined Sh1.5 billion for giving over Sh136 million bribes to various government institutions for tenders.

Respected institutions like the Kenya Air Force, Ministry of Defence and the Armed Forces Canteen Organization (AFCO) are some of the institutions named for taking millions in bribes from the company to allow it win tenders.

“Between 2007 and 2011, Treadsetters, a local partner of Goodyear paid over $1.5 million (Sh136 million) in bribes in connection with the sale of tires,” ruled the Securities and Exchange Commission.

The US Securities and Exchange Commission on Monday charged Goodyear Tire & Rubber Company with violating the Foreign Corrupt Practices Act when its subsidiary in Kenya, Treadsetters, paid bribes to land tire sales.

Other government organs named in the scandal includes Kenya Ports Authority,  Nzoia Sugar Company, Ministry of Roads, the East African Portland Cement Company and Telkom Kenya.

“During that same time period, Treadsetters also made approximately $14,457 in improper payments to local government officials in Kenya, including city council employees, police, and building inspectors,” said SEC.

Goodyear agreed to pay more than $16 million (1.45 billion) to settle the SEC’s charges.

According to the SEC’s order instituting a settled administrative proceeding, Goodyear failed to prevent or detect more than $3.2 million in bribes during a four-year period due to inadequate FCPA compliance controls at its subsidiaries in sub-Saharan Africa.

“Bribes were generally paid in cash to employees of private companies or government-owned entities as well as other local authorities such as police or city council officials,” SEC said.

The improper payments were falsely recorded as legitimate business expenses in the books and records of the subsidiaries, which were consolidated into Goodyear’s books and records.

Goodyear is also accused of paying bribes in Angola.

Written by Kahawa Tungu


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