Hitachi Ltd.'s $19 million settlement with the U.S. Securities and Exchange Commission provides insight into how the company became a crucial supplier to South Africa's behind-schedule power plants that have yet to solve the country's electricity shortage.
The SEC last week said Hitachi had "inaccurately recorded improper payment" to an arm of South Africa's ruling African National Congress. Hitachi neither admitted guilt nor denied the allegations, the SEC said in a statement.
It said the Japanese company landed $5.6 billion in contracts to build boilers for new power plants intended to boost South Africa's electricity-generation capacity by about 25 percent, while what it described as an ANC "front company," Chancellor House Holdings Ltd., made a 5,000 percent return on its investment in the local Hitachi unit.