Avon Suspends 4 Execs In China Bribery Probe

Reuters:

Avon Products Inc, the world’s top direct seller of cosmetics, suspended four executives pending an internal investigation of bribery allegations in China, sending its shares down 8 percent.

Avon asked three executives in Asia and another in New York to take an administrative leave of absence pending the probe’s outcome, company officials confirmed on Tuesday.

The company’s investigation focuses on compliance with the U.S. Foreign Corrupt Practices Act (FCPA), a law that outlaws bribery of foreign officials.

In June 2008, Avon began an investigation into its China operations over an allegation of improper expenses for items like travel and entertainment on behalf of a Chinese government official.

In July 2009, the company said it had widened the probe to review its practices related to FCPA and related U.S. and foreign laws in additional countries.

The company has cooperated with the U.S. Department of Justice and the U.S. Securities and Exchange Commission since the probe began.

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