A Panasonic Corp unit that makes inflight entertainment and communications systems for airlines is under a bribery investigation by US regulators, the Wall Street Journal reported.
The legal department of Panasonic Avionics, based in Lake Forest, California, told executives and employees to preserve documents that may be relevant to the government investigation, the newspaper said yesterday, citing company documents.
Chieko Gyobu, a spokeswoman for the Osaka, Japan-based parent company, declined to comment.
Employees were asked to preserve documents related to gifts or benefits offered to airline employees or government officials, as well as any that reported rumors, concerns or complaints of alleged bribery or corruption, the report said, citing a Jan. 20 company notice. Panasonic Avionics received a subpoena from government investigators last month, the Journal said, citing a company notice on Monday last week.
Both notices reference the 1977 Foreign Corrupt Practices Act, which bars US companies and those listed on US stock exchanges from paying bribes to foreign government officials, the report said.
The January notice said Panasonic intends to cooperate with the investigation and that the existence of any inquiry does not mean the company broke the law, the newspaper said.
Panasonic shares dropped 3.4 percent to ￥632 in Tokyo trading, compared with a 2.1 percent drop in the Nikkei 225 Stock Average.
The company’s avionics unit is the “world leader” in inflight entertainment and communications, with the most systems installed and serving the most airlines, according to its Web site. Panasonic began expanding into avionics in 1979 and was among the first to market video equipment to airlines, it says.
Panasonic is struggling to recover from a record loss in the year ended in March last year.
The company said last week it plans to revive profit at its TV-making unit and boost sales of housing products to meet a target for operating income of ￥350 billion (US$3.7 billion) in three years.
The company is targeting growth in business-to-business segments, which include the avionics unit and navigation systems and batteries for cars.
Its revival measures also include selling control of its logistics unit and the possible sale of a stake in its healthcare division.
Panasonic has forecast a net loss of ￥765 billion for the fiscal year that ended on Sunday, following a ￥772 billion loss in the previous 12 months.