Kraft Foods, the world’s second biggest food company, has said it is facing investigation by the Securities and Exchange Commission (SEC) for possible corrupt practices in India by its arm Cadbury relating to a manufacturing plant there.

In a regulatory filing, the company said on February 1, 2011, it received a subpoena from the SEC in connection with an investigation under the Foreign Corrupt Practices Act (FCPA).

“The subpoena...primarily relates to a Cadbury facility in India that we acquired in the Cadbury acquisition and primarily requests information regarding dealings with Indian governmental agencies and officials to obtain approvals related to the operation of that facility,” it said.

While it did not elaborate on the details, Kraft Foods said: “We are cooperating with the US government in its investigation of these matters.”

Kraft Foods had acquired Cadbury globally, including the Indian operations, last year for $19.6 billion. In India, Cadbury has five factories located in Maharashtra, Karnataka, Andhra Pradesh and Madhya Pradesh producing confectionery items.

Cadbury India spokesperson declined to comment on the developments and referred queries to counterpart in Chicago, and immediate response could not be obtained.

In its SEC filing, Kraft Foods said after it acquired Cadbury in February 2010, the firm began reviewing and adjusting Cadbury’s operations in light of US and international standards as well as Kraft Foods’ policies and practices.

“Through our reviews, we determined that in certain jurisdictions, including India, there appeared to be facts and circumstances warranting further investigation. We have undertaken these investigations, which are ongoing,” the filing said.

“While we cannot predict with certainty the results of these or any other legal matters in which we are currently involved, we do not expect that the ultimate costs to resolve any of these matters will have effect on our financial results,” it added.

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