Chicago / IL. (khc) The Kraft Heinz Company reached a settlement with the U.S. Securities and Exchange Commission (SEC) on 03 September, concluding and resolving in its entirety the previously disclosed SEC investigation relating to activities in the Company’s procurement area prior to 2019. As reflected in the SEC’s Order, those activities included misconduct by certain procurement employees who engaged in manipulation of supplier agreements in order to achieve group and individual performance targets tied to bonuses. The impact of the 59 transactions at issue in the Order did not affect the Company’s reported Adjusted Ebitda by more than one percent in any reporting period. Under the terms of the settlement, the Company has agreed to pay a civil penalty of USD 62 million without admitting or denying the findings in the SEC’s administrative order. The Company recorded an accrual for the full amount of this penalty in the second quarter of 2021, which was reflected in the Company’s 10-Q financial results. The Company has also agreed to refrain from future violations of specified provisions of federal securities laws and rules.
The Company has fully cooperated with the SEC throughout its investigation and took prompt and extensive remedial action and proactive steps to improve our internal policies, procedures, and internal controls over financial reporting. The internal control weaknesses the Company identified and disclosed in 2019 were fully remediated in 2020. With own words Kraft Heinz is much stronger today because of the actions it took and embedded into its company culture.