Panasonic says its avionics business being probed by US authorities

Panasonic Corp said on Thursday its avionics unit is being investigated by US authorities under the Foreign Corrupt Practices Act (FCPA) and that it had replaced the long-time head of the business.

In a stock exchange filing, the Japanese electronics maker said Panasonic Avionics Corp, a major supplier of inflight entertainment systems, is being probed by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).

Panasonic did not specify the nature of the investigation, but said it has been fully cooperating with the investigation and has begun talks with the DOJ and the SEC to resolve the matter.

In a separate statement, the company said it was immediately replacing the unit's chief executive Paul Margis, who has headed the company since 2005, with his deputy Hideo Nakano.

"We are not in a position to comment on details since the investigation has just began," Panasonic's Senior Managing Director Hideaki Kawai told a results briefing.

Kawai also declined to give a reason for the change of CEO at Panasonic Avionics.

Panasonic Avionics is headquartered in California with over 4,500 employees globally. In addition to inflight entertainment, it supplies communications equipment to airlines.

The Foreign Corrupt Practices Act is an anti-bribery law that bans companies from making payments to foreign government officials to secure business.

Separately, Panasonic raised its full-year operating profit outlook on Thursday as it benefited from a weaker yen that has boosted the value of earnings repatriated from overseas.

It forecast group profit of 265 billion yen ($2.35 billion) for the year ending March 31, up from a previous estimate of 245 billion yen under international financial reporting standards (IFRS).