Uber may have resorted to bribery in at least five Asian countries, according to Bloomberg.
The newswire reported Wednesday that the ride-hailing company, which is facing a federal probe into possible breaches of the Foreign Corrupt Practices Act, has already notified officials about payments made by its staff in Indonesia. It added that attorneys are also focusing on activities in China, Malaysia, India, and South Korea.
The report adds detail to the troubles facing new CEO Dara Khosrowshahi as he sets about fixing the company’s dysfunctional culture. It also arguably sheds further light on the decision of chief legal officer Salle Yoo to step down, a decision that became public last week. Uber’s head of Asian operations Michael Brown said Tuesday that he too plans to leave. Khosrowshahi has indicated he will need two years to make the company fit for an initial public offering by addressing all the issues left behind by ousted CEO Travis Kalanick.
In Indonesia, Uber’s local staff reportedly made a number of small payments to police officers to get them to turn a blind eye to the fact that it was operating a support office for local drivers outside the registered business zones of the capital, Jakarta. Bloomberg said that “at least one senior member of the legal team at Uber “decided not to report the incident to U.S. officials” when it became known late last year.
Bloomberg reported that O’Melveny & Myers, the law firm that is conducting an internal review of potential misdeeds for Uber, is also looking into a corporate donation of “tens of thousands of dollars” that it made to the Malaysian Global Innovation and Creativity Center. Within a year, a Malaysian government pension plan sponsor had invested $30 million in Uber and Malaysia’s government had passed legislation favorable to Uber, Bloomberg said. The MGICC denied any improper quid-pro-quo.
Partners at law firm Sheppard Mullin argued in a recent blog post that Uber’s problems are typical for a fast-growing startup. “As the company expands to international markets, it will face a rapidly expanding series of compliance challenges, even as its success draws more scrutiny from regulators. “Playing abroad in a regulated industry requires constant interaction with foreign government officials. Each of those interactions creates a risk that some payment, offer, or business hospitality could be considered an FCPA violation.