SAO PAULO: Brazilian planemaker Embraer SA on Monday reached an agreement with US and Brazilian authorities to settle a six-year corruption investigation, paying $205.5 million to turn the page on signs of graft in four foreign contracts.
Embraer and US investigators said an investigation had found evidence of wrongdoing in deals with Saudi Arabia, India, Mozambique and the Dominican Republic from 2007 through 2011.
The fine due to US and Brazilian authorities is in line with a $200 million provision Embraer made in July.
A complaint from the US Securities and Exchange Commission (SEC) alleged that Embraer had made more than $83 million in profits from foreign contracts involving $11.7 million in bribes and other payments concealed through false accounting.
The planemaker's shares rose 0.5 percent in Sao Paulo, reversing early losses on news of the accord, which offers closure in a case that risked prosecution of the company under the US Foreign Corrupt Practices Act.
"The settlement is no question a positive, although the reaction may be more muted as management has done a good job communicating the potential implication of the investigation in recent months," said RBC Capital Markets analyst Derek Spronck.
The US Department of Justice said two individuals had also been charged in Saudi Arabia for their alleged roles in the scheme there and Brazilian authorities charged 11 people for alleged involvement in the Dominican deal. Embraer said it is not party to those parallel criminal investigations in Brazil.
Embraer, the world's third-largest maker of commercial jets, has replaced much of its senior management in recent years, reinforced compliance efforts and curtailed use of third-party sales representatives, who drew suspicion in deals under review.
A sweeping internal investigation led by Baker & McKenzie expanded beyond the scope of US authorities' initial inquiry, reviewing hundreds of thousands of documents and conducting more than 100 interviews, the company said in a public statement.
In the process, Embraer said that investigators found the company was responsible for wrongdoing in four transactions between 2007 and 2011.
The deals involved:
Eight Super Tucano light attack planes sold to the Dominican Republic for about $92 million.
Three E170 jets sold to state oil company Saudi Aramco for business aviation in a roughly $93 million deal.
Three surveillance aircraft sold to India for $208 million.
Two E190 commercial jets sold to Mozambique's state airline LAM for about $65 million
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