Monday, August 29, 2005

Immucor FCPA Investigation

Immucor Inc., which is in the blood-transfusion business, announced (here) that the SEC had issued a formal order of investigation of payments made in Italy that violated the FCPA.  Immucor announced the possible violations last year, and in its most recent 10-Q (here) disclosed the following:

In addition, as reported in a press release issued by the Company on November 2, 2004, the Company’s Italian subsidiary and Dr. Gioacchino De Chirico, the former President of the Italian subsidiary, are the subjects of a criminal investigation by Italian authorities in Milan, Italy centered on the activities of a well-known Italian physician and hospital administrator. The investigation concerns alleged improper cash payments by several companies to the physician in exchange for favorable contract awards by his hospital in Italy. Based on the Company’s internal investigation discussed further below, it does not appear that the Italian subsidiary made any improper payments to the physician in question. However, the doctor rendered services as the organizer and chairman of a convention sponsored by the Italian subsidiary in October 2003, for which he received 13,500 Euros, and the invoice for those services did not properly identify the doctor or the nature of his services, in violation of the books and records provisions of the Foreign Corrupt Practices Act.

Immucor announced on August 15 (here) that it would not be able to file its 10-K for the most recent fiscal year because it had not resolved its internal control problems that came to light in its internal investigation and "is currently in the process of finalizing its review of certain accounting matters relevant to the completion of its audit and its assessment related to its internal controls over financial reporting as of May 31, 2005, as required by Section 404 of the Sarbanes-Oxley Act, and requires additional time to complete such review and assessment."  The move to a formal investigation, along with the continuing internal control problems, does not bode well for the company.  (ph)

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