Daimler accused of paying bribes in China for deals

Shanghai, March 25 (Gasgoo.com) U.S. prosecutors accused Daimler AG, the maker of Mercedes cars, of engaging "in a long-standing practice of paying bribes" to secure deals in China, Russia, Turkey, Egypt, Nigeria, Iraq and at least 16 other countries between 1998 and early 2008, media reported this week.

The German car and truck maker was charged with violating US bribery laws by showering foreign officials with millions of dollars and gifts of luxury cars to win business deals. Daimler plans to pay $185 million to settle charges by the US Justice Department and Securities and Exchange Commission (SEC).

While its German and Russian units plan to plead guilty to the criminal charges, Daimler and its China unit will enter a two-year deferred prosecution agreement.

The charges filed Tuesday detailed transactions spanning from 1998 to early 2008 that involved hundreds of payments worth tens of millions of dollars to foreign officials in return for contracts worth hundreds of millions of dollars.

In one case, Daimler and its distributor gave an unnamed Turkmenistan government official an armored Mercedes passenger car that was valued at more than 300,000 euros for his birthday in February 2000. At the time the automaker was negotiating to sell dozens of vehicles to the Turkmenistan government.

Daimler owned US automaker Chrysler from until 1998 to 2007. The SEC probe began in 2004 when an auditor complained he was fired for protesting secret bank accounts used to pay foreign officials.

Daimler's luxury car division Mercedes-Benz sold 15,300 cars in China in the first two months, up 155% year on year, retaining its position as the fastest-growing luxury brand in China. Mercedes posted record sales of 68,500 cars in China last year.

Daimler makes Mercedes-Benz cars in China at a joint venture with Beijing Auto and produces commercial vehicles with southeastern China's Fujian Motors. Daimler and BYD recently agreed to develop a new electric vehicle for the Chinese market.