Vietnamese police launch probe into Bio-Rad bribery scandal

By Thai Son, Thanh Nien News

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Bio-Rad's campus in Hercules, California. Photo credit: Bio-Rad's campus in Hercules, California. Photo credit:


Vietnamese police have launched an investigation into allegations that US diagnostic equipment maker Bio-Rad paid US$2.2 million in bribes to Vietnamese health officials from 2005 to 2009 to win business contracts.
The Ministry of Public Security launched the investigation into the allegations following a request from Health Minister Nguyen Thi Kim Tien on November 5.
Vietnamese police said they would ask the US Embassy in Vietnam and other relevant authorities in the US to provide documents related to the allegations.
Meanwhile, Vietnam’s Ministry of Health has ordered medical equipment and drug administration departments to provide a list of state-run hospitals that have placed orders with Bio-Rad since 2005.
Bio-Rad  Laboratories Inc. agreed Monday to pay about $55 million to end a Justice Department investigation into whether it failed to prevent the bribery of government officials in Russia, Thailand and Vietnam, and falsified records to hide its payments.
The company entered a non-prosecution agreement to resolve charges that it violated the Foreign Corrupt Practices Act by reporting fake payments in connection with sales in Russia.
It also entered a civil settlement with the US Securities and Exchange Commission (SEC), which said units of the California-based company paid $7.5 million in bribes to officials in Russia, Vietnam and Thailand to win business, enabling them to make $35 million in illicit profits.
The bribes were masked as legitimate expenses such as commissions or advertising and training fees, the regulators said.
Bio-Rad's payout includes a $14.35 million criminal fine to the Justice Department, and a $40.7 million return of illegal profit and interest to the SEC, for violations that allegedly took place between 2005 and 2010.
The Justice Department said the criminal sanctions were not more severe because Bio-Rad disclosed the misconduct and fully cooperated in its probe by making employees available for interviews and producing documents from overseas.

Bio-Rad maintained a sales representative office in Vietnam from 2005-2009.

During that time, the office made improper payments of $2.2 million to agents and distributors to then funneled the money to officials at government-owned hospitals and laboratories to get them to agree to buy Bio-Rad’s products, according to the SEC.

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