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Avery Dennison agrees to pay $200,000 fine in China bribe case

The Pasadena label maker was accused of giving Chinese officials kickbacks, trips and gifts to win business. The firm said it uncovered the actions of some employees and reported them to authorities.

July 29, 2009|Nathan Olivarez-Giles

Pasadena label maker Avery Dennison Corp. agreed to pay a $200,000 fine over charges that employees bribed Chinese government officials with kickbacks, sightseeing trips and gifts, the Securities and Exchange Commission said.

As part of the settlement, the SEC said Tuesday, Avery neither admitted nor denied any wrongdoing.

Avery spokesman David Frail said the company discovered some questionable actions by a handful of employees, disciplined them and reported the incidents to the SEC and Justice Department.

The fine was the result of a civil complaint and an administrative order filed by the SEC accusing Avery, which operates in China and more than 60 other countries, of making and hiding illegal payments in order to win business contracts.

The SEC said that from 2002 to 2005, the Reflectives Division of Avery China Co. Ltd., Avery's Chinese subsidy, paid about $30,000 to Chinese officials. In one transaction, Avery China got a contract with a state-owned company by paying a Chinese official about $25,000 through a distributor, the complaint said. Avery made a $273,213 profit from the deal, the SEC said.

In August 2004, Avery China was awarded two government contracts to install new graphics on about 15,400 police cars. The company received the contracts by agreeing to increase the sales price of the graphics by more than $41,000, to be funneled to government officials. But Avery's Asia Pacific Group discovered the scheme before the bribes could be paid and blocked the illegal payments, the commission said.

In 2007, an Avery-owned company paid bribes totaling $51,000 to officials from China and several other countries, the SEC said.


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