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Tobacco Companies Settle Bribery Charges


August 7, 2010 (The News & Observer, Raleigh, N.C.) Alliance One of Morrisville and another tobacco company agreed to pay nearly $30 million to settle charges that they bribed foreign officials to get lucrative overseas tobacco sales contracts.



The companies, Universal Corp. of Richmond, Va., and Alliance One, faced civil and criminal charges from the Securities and Exchange Commission and Justice Department, the government announced Friday. The companies harvest, process and sell leaf tobacco to cigarette makers.

"These large tobacco merchants used secret payments to improperly win business and curry favor with foreign government officials around the globe," said Christopher Conte, associate director of the SEC's enforcement division.

Alliance One is accused of bribing officials in Thailand, China, Greece, Indonesia and Kyrgyzstan. Universal was accused of bribing officials in Thailand, Malawi and Mozambique.

The companies were charged with paying to secure exclusive contracts with tobacco farmers and to get favorable legislation passed, among other things.

To settle the charges, Alliance One has agreed to pay a criminal fine of $9.45 million and return $10 million in profit. Universal paid a criminal fine of $4.4 million and returned $4.5 million in profit.

Alliance One spokesman Joel Thomas could not be reached for comment Friday.

Alliance One was formed following the 2005 merger of tobacco merchants Dimon of Danville, Va., and Standard Commercial of Wilson. The combined company moved its headquarters to Morrisville in 2006. It employs about 5,000 people worldwide, including 350 people in North Carolina.

On Thursday, Alliance One reported that its latest quarterly revenue rose to $490.96 million, up nearly 20 percent from a year earlier. Its net income was $13.8 million, down about 5 percent.

Alliance One shares rose 7 cents to close at $3.41 Friday. The stock is down about 30 percent this year.

Universal Corp. said in a statement that the company voluntarily reported the problems to authorities and that it has cooperated with the investigation.

"We have absolutely no tolerance for this type of activity," CEO George C. Freeman III said in a statement.

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