Cisco says probing possible bribery in Russia, other countries

By Marina Lopes

NEW YORK (Reuters) - Cisco Systems Inc is investigating potential violations of U.S. bribery laws by the company and its resellers in Russia, Eastern Europe and Central Asia, but doesn't expect financial results to be materially affected, it said in a regulatory filing.

Cisco, the network equipment maker, launched the probe at the request of the U.S. Justice Department and the Securities and Exchange Commission after allegations arose that some of its business and discounting practices violated the U.S. Foreign Corrupt Practices Act, the company said.

The law prohibits U.S. corporations from bribing foreign officials, candidates and parties.

Cisco declined to comment beyond what the filing, dated February 20.

 

"The company takes any such allegations very seriously and is fully cooperating with and sharing the results of its investigation with the Commission and the Department," Cisco said in the filing.

"While the outcome of the Company's investigation is currently not determinable, the Company does not expect that it will have a material adverse effect on its consolidated financial position, results of operations, or cash flows," it said.

In the filing, Cisco said the countries in the investigation collectively contribute less than 2 percent of its revenues.

In 2010, U.S. and German authorities launched an ongoing investigation into whether Hewlett-Packard Co employees in a German subsidiary violated the act and engaged in a bribery scheme involving a 35 million euro contract to provide equipment to the Chief Public Prosecutor's Office of the Russian Federation.

Shares of San Jose, California-based Cisco fell 0.6 percent to $21.39 on the New York Stock Exchange at midday.

(Reporting by Marina Lopes and Nicola Leske; Editing by Jeffrey Benkoe)