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Panasonic subsidiary at center of U.S. bribery investigation

A subsidiary that makes in-flight entertainment and communications systems is under investigation for allegedly paying bribes to secure contracts, according to documents reviewed by The Wall Street Journal.

A unit of Japanese electronics giant Panasonic is under investigation by U.S. authorities for allegedly paying overseas bribes to secure business contracts, according to a Wall Street Journal report.

Panasonic Avionics, a subsidiary that makes in-flight entertainment and communications systems for airlines, has received a subpoena for communications among company executives, consultants, and others, according to company documents reviewed by the Journal. A January 20 notice instructed recipients to preserve documents "concerning any benefits or gifts provided, or the payment of anything of value, by Panasonic or PAC to any airline employee or government officials."

The company retention documents reviewed by the Journal did not indicate which government agency was investigating the Lake Forest, Calif.-based subsidiary. Documents related to the probe reference the 1977 Foreign Corrupt Practices Act, which prohibits U.S. companies listed on U.S. stock exchanges from paying bribes to foreign government officials, the report said. The law is enforced by the U.S. Department of Justice and the Securities and Exchange Commission, which declined to comment to the Journal.

CNET has contacted Panasonic for comment and will update this report when we learn more. However, a Panasonic spokesperson told the Journal that it did not comment on government investigations.

The probe comes as the Japanese-based company faces serious financial challenges. In November, Panasonic announced it would cut 10,000 jobs by the end of March, just months after it laid off 36,000 employees in the previous fiscal year.