American tyre company Goodyear to pay Sh1 billion for bribery in Kenya and Angola

gyAmerican tyre company Goodyear has been fined Sh1.5 billion ($16 million) by US regulators over allegations that its subsidiaries paid bribes to secure business in Kenya and Angola.

According to a document from the US Securities and Exchange Commission (SEC) seen by the Nation, the management of Goodyear’s Kenyan subsidiary, Treadsetters Tyres Limited, authorised and paid bribes to employees of government-owned and affiliated entities.

The alleged bribes were paid in cash and recorded on Treadsetters’ books as expenses for promotional products.

Between 2007 and 2011, the SEC alleges that Treadsetters paid more than Sh136 million ($1.5 million) in bribes to employees of Kenya Ports Authority, the Armed Forces Canteen Organisation, Nzoia Sugar Company, the Kenya Air Force, Ministry of Roads, Ministry of State for Defence, the East African Portland Cement Company and Telkom Kenya.

Another Sh1.3 million ($14, 457) is alleged to have been paid to local government officials including city council employees, police and building inspectors.


“Goodyear did not detect or prevent these improper payments because it failed to conduct adequate due diligence when it acquired Treadsetters, and failed to implement adequate compliance training and controls after the acquisition,” said SEC in a statement.

Goodyear acquired a minority interest in Treadsetters in 2002.

By 2006, the American company had acquired a majority ownership in the Kenyan company.

Treadsetters’ founders are however said to have continued to run the daily operations of the company which puts the firm’s general manager and finance director serving during the relevant time at the centre of the scheme.

SEC estimates that at the time the bribes were given out, Treadsetters had annual revenues of approximately $20 million.

Goodyear’s subsidiary in Angola, Trentyre Angola, is also alleged to have paid out bribes amounting to Sh145.6 million ($1.6 million) to employees of government entities and private companies to obtain tyre sales at the same time the Kenyan company is said to have committed the offence.




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