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SQM shares ease after $30m legal settlement

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Shares in Sociedad Quimica y Minera de Chile (SQM) eased, on the news that is paid $30.5m to resolve its legal difficulties in the US.

The Chilean-based fertilizer and mining company will pay $30.5m to resolve the threat of legal and civil action from US officials.

SQM, which is part owned by Canadian fertilizer-giant PotashCorp, agreed the payment to resolve simultaneous civil and criminal cases over breaches of the US Foreign Corrupt Practices Act.

Shares in SQM were down 1.0% in morning deals in New York, at $30.55.

Legal threat resolved

SQM agreed to pay a criminal penalty of around $15.5m, and also pledged to implement internal controls, as well as submit to independent external oversight, in a deferred prosecution agreement with the US Department of Justice.

At the same time, SQM reached a settlement with the Securities and Exchange Commission, including the payment of a $15.0m civil monetary penalty.

BTG Pactual was upbeat on prospects, saying that the settling of the case was "technically a non-event," but noted that it "puts an end to any liability under US law".

"The wider importance of the case is that it provides for termination of any regulatory problems for SQM in the US."

Political payments

Federal officials alleged that SQM knowingly failed oversee payments made by executives to Chilean political foundations between 2008 and 2015, and allowed these payments to be disguised by falsifying records.

SQM admitted having paid nearly $15 million between 2008 and 2015 to vendors, with no evidence any goods or services were received.

In 2015, SQM was rocked by a scandal involving a series of payments to political parties, as part of larger scandal that saw the head of right-wing party UDI resign.

SQM's then-chief executive was fired for his failure to co-operate with the investigation, and a subsequent shake-up of the board removed the chairman Julio Ponce, a major shareholder and the son-in-law of the late dictator Augusto Pinochet.

By William Clarke

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