Mercedes 2010 Annual Report Download - page 72

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On April 7, 2010, Daimler AG and the Renault-Nissan Alliance
reached an agreement on wide-ranging strategic cooperation
that will bring both sides advantages from a series of specific
projects and the shared use of best practices. In particular,
this relates to a new, shared architecture for small cars, the shared
use of fuel-efficient three- and four-cylinder engines and coopera-
tion in the field of light commercial vehicles. In addition, a cross-
shareholding was agreed upon: The Renault-Nissan Alliance
received a 3.1% equity interest in Daimler, served with treasury
shares, and in return Daimler received equity interests of 3.1%
in each of Renault and Nissan.
BYD Company Limited and Daimler AG signed an agreement
on May 27, 2010 on the establishment of a 50:50 joint venture,
Shenzhen BYD Daimler New Technology Co. Ltd., for the devel-
opment of an electric vehicle for the Chinese market. BYD and
Daimler will invest a volume of RMB600 million (approximately
€71 million) in the joint venture. The new company is to develop
a new generation of electric vehicles combining Daimler’s exper -
tise in automotive architecture and safety with BYD’s know-how
in the fields of battery technology and electric vehicle systems.
The vehicle will be sold under a new brand to be jointly created
by Daimler and BYD. The brand rights will be owned by the joint
venture.
On June 17, 2010, Daimler AG and the European Bank for Recon-
struction and Development (EBRD) successfully increased their
strategic shareholding in Russian truck manufacturer Kamaz.
Already on February 11, 2010, Daimler AG had signed a memo-
randum of understanding on the acquisition of the 5% of Kamaz
shares held by Troika Dialog Limited. As a result, Daimler increased
its equity interest in Kamaz by one percentage point to 11%
while the remaining 4% of Kamaz shares are legally owned by the
EBRD. Due to the contractual terms and conditions, beneficial
ownership of the shares held by the EBRD is assigned to Daimler
under IFRS.
Daimler and Foton have made a large step forward in their
negotiations on the establishment of a 50:50 joint venture.
After the Chinese National Development and Reform Commission
approved the plans, the joint-venture agreement was signed
on July 16. Daimler will contribute its technological expertise, in
particular with diesel engines and emission technology. Both
partners will use Foton’s Auman truck brand as a platform in China
and as a basis for joint exports. The joint venture is another
important milestone in the implementation of Daimler’s China
strategy.
On January 11, 2011, Daimler’s subsidiary Mitsubishi Fuso Truck
and Bus Corporation (MFTBC) carried out a capital increase
of 30 billion Japanese yen (€274 million). In this context, Daimler
increased its equity interest in MFTBC from 85% to 89%; the
stake held by Mitsubishi Group companies decreased to 11%.
Settlement with US authorities
On April 1, 2010, Daimler AG reached a settlement with the
United States Securities and Exchange Commission (SEC) and the
US Department of Justice (DOJ) concluding investigations of
possible violations of the US Foreign Corrupt Practices Act (FCPA).
As part of the settlement, Daimler paid fines and penalties
of US$93.6 million (approximately €70 million) and agreed to
disgorge profits of US$91.4 million (approximately €68 million).
Daimler had recognized provisions in a sufficient volume for this
in previous years.
Daimler cooperated with the SEC and the DOJ on the investiga-
tions, which started in the fall of 2004. In parallel, Daimler has
developed a wide-ranging compliance organization to ensure that
its business practices conform to the Group’s Integrity Code and
the provisions of applicable law in the future (see pages 158 f).
The investigations of Daimler AG and Daimler North East Asia
Ltd. carried out by the DOJ were deferred on the premise that
Daimler will not violate the provisions of the FCPA during the two-
year term of the agreements and will maintain a comprehensive
compli ance program. This program is designed to ensure, inter
alia, compliance with anti-bribery laws such as the FCPA. Upon
successful satisfaction of the terms set forth, the proceedings
will be dismissed without further action. In addition, former
US federal judge Louis Freeh will serve for three years as an
independent compliance monitor; his role will include monitoring
and documenting the Company’s compli ance program. Further
information on this matter is provided in Note 28 to the Consoli-
dated Financial Statements.
New Board of Management position for Integrity
and Legal Affairs
Daimler pursues the goal of creating a corporate culture that
not only adheres to the provisions of applicable law, but also meets
the highest ethical standards and is regarded as exemplary
throughout the industry.
In order to achieve this goal, the Supervisory Board decided on
September 28, 2010 to create a new Board of Management
position for the area of Integrity and Legal Affairs. The responsi-
bilities of the new member of the Board of Management include
the management of the global legal and compliance organization
and related processes, as well as business ethics and the sustained
anchoring of compliance and integrity throughout the Group.