According to the SEC, from 2006 to 2014, Polycom’s Vice President of China engaged in a scheme to obtain business from customers in the public sector by paying bribes to Chinese government officials through distributors in China.
Before paying a bribe, distributors requested a discount on communications products from Polycom China. The SEC alleges that senior managers at Polycom China provided the discount even though they knew the discount was intended to cover the cost of bribes. After receiving the discount from Polycom China, distributors made cash payments to government officials who had the ability to influence the purchase decisions of government agencies and state-owned companies.
The SEC further alleges that under the direction of Polycom’s Vice President of China, senior managers created a sales management system to record the bribe payments made by distributors. Sales personnel at Polycom China were instructed to enter the payments into the secret management system instead of Polycom’s approved customer relations management system. Senior managers then recorded the deals with distributors in the approved management system by characterizing the bribe payments as legitimate discounts given to prevent customers from buying from a competing communications provider.
Polycom China personnel were also instructed to use non-company email addresses when communicating with the distributors to conceal the deals from Polycom personnel outside of China.