UPDATED 23:41 EDT / SEPTEMBER 19 2017

EMERGING TECH

Uber reviews Asia business units in response to U.S. bribery investigation

Uber Technologies Inc. is reported to have launched a review into whether it broke antibribery laws in Asia following news in August that it was being investigated on those grounds by U.S. Department of Justice.

Bloomberg reported that Uber has employed law firm O’Melveny & Myers LLP to examine foreign transaction records and to interview employees “raising questions about why some potentially problematic business dealings weren’t disclosed sooner,” according to unnamed sources. Uber is also said to have notified U.S. officials about “payments” made by staff in Indonesia.

The probe is focusing on at least five Asian countries, according to the report: China, India, Indonesia, Malaysia and South Korea. The suggestion is that Uber may have made payments to companies related to the Malaysian government in an attempt to influence lawmakers there.

Uber has previously been accused of attempting to bribe officials in India to hide mention of the company in a case that involved an accident with one of its drivers. In another alleged case, Uber employees in Indonesia are claimed to have bribed local officials over a planning dispute, with the employees recording the transactions in their expense accounts as “payments to local officials.”

Bribery is standard practice in much of Asia and is said to be getting worse, but U.S. companies are prohibited in participating in the practice under the Foreign Corrupt Practices Act. The act, introduced in 1977, applies to U.S. businesses, American nationals, citizens and residents “acting in furtherance of a foreign corrupt practice whether or not they are physically present in the U.S.” Any person or entity found to be making “payments to foreign government officials to assist in obtaining or retaining business” can be subject to both fines and jail time.

That Uber has decided to launch a probe into its operations in Asia could be argued as a case of being too little, too late. On the other hand, it could also be seen as recently appointed Chief Executive Officer Dara Khosrowshahi acting decisively in tackling a serious problem for the company. Not only could the investigation result in further scandal for the troubled ride-hailing startup but also put at risk the future of the company’s business units in the region.

Photo: Kiwiev/ Wikimedia Commons

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