(Adds statement from a RAE spokeswoman.)
RAE Systems Inc. (RAE) agreed to pay $1.3 million to settle U.S.
Securities and Exchange Commission charges it made improper
payments through two of its Chinese joint-venture entities to
obtain Chinese government contracts, the agency said Friday.
The SEC had charged the maker of gas and radiation detectors
with violations of the Foreign Corrupt Practices Act for making
$400,000 in alleged improper payments.
The SEC said the payments to Chinese officials to win contracts
for RAE's gas- and chemical-detection products resulted in about $3
million in revenue and garnered more than $1.1 million of illicit
profits.
RAE in September agreed to be taken private for $95.3 million by
investment firm Battery Ventures.
Kirsten Chapman, a RAE spokeswoman, said management was "pleased
to have resolved the concern." She added it was "positive in that
the settlement amount is less than what RAE had accrued for the
settlement."
According to the SEC's complaint, the payments--which allegedly
occurred from 2004 to 2008--were made primarily by the direct sales
force utilized by RAE at two joint-venture entities.
RAE agreed to pay nearly $1.2 million in disgorgement and the
rest in prejudgment interest. RAE also agreed to comply with
certain undertakings regarding the act's compliance program. The
settlement is subject to court approval.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com