Germany: Mercedes-Benz Is At The Centre Of A Bribery And Corruption Investigation In Which It Says It Is The Injured Party

Angelika Hellweger of financial crime specialists Rahman Ravelli considers the situation.

The premises of German car manufacturer Mercedes-Benz has been searched as part of a bribery investigation.

The Stuttgart prosecutor's office said it conducted searches at business premises and private homes as part of an investigation into two employees of an unnamed car company who are suspected of bribery and corruption.

Mercedes-Benz then confirmed that it was the company in question. It also stated that it was "injured parties in the case'', was filing a charge and was supporting the authorities in their investigation.

Reports have stated that the investigation is focused on allegations that the employees accepted millions of euros in bribes to ensure certain suppliers were awarded contracts with Mercedes-Benz.

Mercedes is part of the Daimler group, which has been subject to corruption allegations in the past. In 2010, Daimler paid $185 million to settle charges brought by the U.S. Justice Department and Securities and Exchange Commission. These related to improper payments worth tens of millions of dollars that were made to foreign officials in at least 22 countries to secure contracts with government customers.

On this occasion, however, Mercedes itself appears to be the victim of corruption and has filed a criminal complaint with the authorities. This could be seen as an indicator that the elimination of corruption has become a greater priority within the business community.

Companies have learnt the hard way - often by having to pay multi-million-dollar charges and settlements - that they can be held responsible for not paying enough attention to the actions of their employees, associated companies, business partners and agents.

The stakes for a company and the potential costs - including protection of their reputation and the interests of their stakeholders - are high if they fail to effectively combat corruption in all its forms. From an environmental, social and governance (ESG) perspective, a growing number of investment managers are looking to anti-corruption measures as part of a company's corporate sustainability and as evidence that companies undertake good and well-managed business practices.