Cisco Under Investigation In Chinese Kickback Scheme
DOJ and SEC have been notified of alleged payments made to firms with possible Communist party ties.
February 17, 2021
In its latest 10-Q, which covers the fourth quarter of 2020, Cisco (CSCO) reveals it is conducting an investigation into ex-employees allegedly involved in what appears to be a kickback scheme:
“The Company is investigating allegations of a self-enrichment scheme involving now-former employees in China.”
The disclosure also suggests that the ex-employees accused in the self-enrichment scheme made illicit payments to state-backed enterprises with possible Communist party connections:
“Some of those employees are also alleged to have made or directed payments from the funds they received to various third parties, including employees of state-owned enterprises.”
The disclosure also reveals Cisco voluntarily shared the contents of its investigation with U.S. authorities:
“The Company voluntarily disclosed this investigation to the Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”). We take such allegations very seriously and we are providing results of our investigation to the DOJ and SEC. While the outcome of our investigation is currently not determinable, we do not expect that it will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.”
Related: ORCL, ANET, ZM, SAS
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