As consumer groups mount legal and consumer actions against Reckitt Benckiser Group plc (RB), legal experts are advising the Korean government to seek cooperation from U.S. and U.K law enforcement agencies to bring justice to the case where hundreds of Koreans were sickened and killed from employment of hazardous material in humidifier sterilizer sold through the company’s Korean unit over a decade.

Formerly called Oxy Reckitt Benckiser, the Korean unit is estimated to have sold 4.53 million humidifier sterilizers containing toxic chemical compound under Oxy brand and allegedly accountable for at least 70 deaths in Korea.

They claim the Foreign Corrupt Practices Act (FCPA) of the U.S. and Bribery Act of the U.K. that allow authorities there to pursue investigations on overseas enterprises can work in favor for Korea’s case against the British company.

They cite precedent cases. For example, in March 2011, the U.S. Securities and Exchange Commission (SEC) fined IBM $10 million for infringing the FCPA after IBM Korea employees were charged of paying bribes of more than 200 million won ($170,000) to Korean government officials during the period of 1998-2003 to sell servers and PCs to the government offices.

It was more or less a criminal punishment imposed by U.S. authorities to a subsidiary of an American company operating in a foreign jurisdiction. IBM Korean operation was hard hit by the incident.

Under the FCPA, the U.S. Justice Department can bring criminal charges and the SEC can impose civil penalties against corporate corruptions. All foreign companies are subject to the law if their stocks are traded on the U.S. exchange or when U.S. communication or banking network systems are used in connection with bribery.

Experts here say without cooperation from U.S. and British authorities, the Korean government may not be able to file charges against Reckitt Benckiser and help victims get rightful compensations from the British company through legal battles.

The U.S. anticorruption law also can be applied to the British company if its shares are publicly traded on the U.S. stock exchange. The parent company also can be accountable for its oversea operations. The British company owns 100 percent stake in the unit in Korea. Moreover U.S. federal authorities are particularly harsh on corruption cases involving government officials. Reckitt Benckiser suspected of paying off a professor at Seoul National University to fabricate test results can fall under the category. The British company also could be found accountable for accounting fraud if it had listed payment to Cho as legitimate outsourced service.

What matters is the government will, one legal expert said. “It all depends on how eager the government is to seek out help from U.S. and British authorities to fight on behalf of its citizens.”

By Jeon Ji-sung and Lee Hyun-jung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]