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By Che Odom
Feb. 22 — Mondelez International Inc., maker of Oreos, Wheat Thins and Toblerone, said the Securities and Exchange Commission served it with a “Wells” notice in connection with the alleged bribery of Indian government officials.
The Wells notice, issued Feb. 11, indicates that SEC officials have made a preliminary determination to recommend that enforcement action be taken against the Deerfield, Ill.-based company for violations of books and records and internal control rules, according to a Form 10-K Mondelez filed on Feb. 19.
The SEC investigation arises out of bribes allegedly paid by Cadbury, which is owned by Mondelez, to Indian officials to win certain approvals and permits .
Kraft Foods Inc. changed its name to Mondelez in 2012 after spinning off its North American grocery operations and after buying U.K.-based Cadbury plc.
Mondelez said it intends to submit a response to the SEC staff, arguing why charges shouldn't be brought against it.
In the filing, Mondelez said that during a 2010 compliance review following its purchase of Cadbury, it found that Cadbury’s overall state of compliance was sound, but “determined that in certain jurisdictions, including India, there appeared to be facts and circumstances warranting further investigation.”
In a prior February 2011 filing, Mondelez disclosed that it received a subpoena from the SEC in connection with a Foreign Corrupt Practices Act investigation. The subpoena requested information regarding dealings with Indian agencies and officials to obtain approvals related to the operation of a Cadbury plant.
Mondelez also said Feb. 19 that it is appealing an order by the Commissioner of the Indian Central Excise Authority that denied the company's exemption request for its India facility and ordered it to pay approximately $88 million in back taxes and penalties.
“We believe that the decision to claim the excise tax benefit is valid and we are continuing to contest the show cause notices through the administrative and judicial process,” Mondelez said.
Attempts to reach Mondelez for comment weren't immediately successful.
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Mondelez's Feb. 19 Form 10-K is available at https://www.sec.gov/Archives/edgar/data/1103982/000119312516469394/d51394d10k.htm.
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