Koenig & Bauer's banknote unit settles Brazilian corruption case via leniency deal

what happened

Koenig & Bauer Banknote Solutions S.A., the Lausanne-based group unit that prints banknotes, has signed a leniency agreement with Brazil's Controladoria-Geral da União (CGU), according to an ad-hoc disclosure reported by Reuters. The deal closes proceedings that began in 2019, which concerned contracts awarded by Casa da Moeda do Brasil between 2008 and 2011 that were allegedly obtained through bribery.

Under the agreement, the unit will pay CHF 11,544,942 within 60 days of signing as compensation to the mint. No punitive fines will apply, and the company keeps its right to bid for public tenders in Brazil. An audit by the Federal Court of Accounts (TCU) remains open, but once the deal takes effect the TCU loses its power to levy fines or bar the company from procurement. If the TCU seeks damages above this sum, the company says it has strong defenses under Brazilian and Swiss law.

The group also plans to ask Swiss prosecutors to amend a 2017 penal order and refund part of the sums already paid. It argues that the Brazilian payment should be offset against profits confiscated in Switzerland that year. Management considers this outcome highly likely and expects no significant effect on the income statement.

why it matters

For Koenig & Bauer investors, the settlement lifts a long-running legal uncertainty and fixes the cost at a known figure. The company says the payment does not weigh on its financial position relative to existing forecasts. The remaining variable is the Swiss refund request, whose outcome still rests on the company's own assessment.

market impact

Koenig & Bauer AG: legal risk removed and payment within forecast gives a neutral backdrop for the shares

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