U.S. meat producer Tyson Foods Inc said it will pay $4 million to the U.S. Justice Department and $1.2 million to the Securities and Exchange Commission to settle a 2007 case over improper payments involving its Mexican poultry subsidiary.
In early 2007, Tyson voluntarily disclosed that improper payments of more than $100,000 had been made by Tyson de Mexico to two Mexican government veterinarians, both directly and through their spouses.
The veterinarians were responsible for certifying chicken products for export as part of a voluntary government inspection program.
Tyson said the payments began before it bought its interest in the subsidiary, now called Tyson de Mexico.
The Springdale, Arkansas-based company said that for years before and after Tyson bought the business, Mexican law permitted direct payments to the veterinarians because they were "approved" government veterinarians who could charge a fee for their services to supplement their government income.
When the two became "official" government veterinarians and started receiving their full salary from the Mexican government, the payments from Tyson de Mexico should have ended, Tyson said.
Tyson said it investigated the matter and promptly stopped the improper payments in late 2006. The company reported its findings to the DOJ and the SEC and cooperated with investigations, which led to claims of violations of the Foreign Corrupt Practices Act.
Tyson said none of the products exported from Tyson de Mexico during the time period involved were shipped to the United States.
Shares in Tyson were down 7 cents, or 0.4 percent, to $18.52 in afternoon trading.