Universal Corporation, Inc. and Alliance One International, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21618 / August 6, 2010

Accounting and Auditing Enforcement Release No. 3170 / August 6, 2010

SECURITIES AND EXCHANGE COMMISSION v. UNIVERSAL CORPORATION, INC., Civil Action No. 01:10-cv-01318 (RWR) (D.D.C.) (filed August 6, 2010)

SECURITIES AND EXCHANGE COMMISSION v. ALLIANCE ONE INTERNATIONAL, INC., Civil Action No. 01:10-cv-01319 (RMU) (D.D.C.) (filed August 6, 2010)

SEC FILES ANTI-BRIBERY CHARGES AGAINST TWO GLOBAL TOBACCO COMPANIES

The U.S. Securities and Exchange Commission today charged two major tobacco companies, Universal Corporation, Inc. and Alliance One International, Inc., with violating, among other things, the anti-bribery provisions of the Foreign Corrupt Practices Act of 1977 ("FCPA") for their involvement in a multi-million dollar bribery scheme with government officials in Thailand to obtain nearly $30 million in sales contracts to supply tobacco. The SEC also charged Alliance One with paying bribes in Kyrgyzstan and making improper payments in China, Greece, and Indonesia and Universal with making improper payments in Malawi and Mozambique. Moreover, the SEC's complaints alleged Universal and Alliance One engaged in books and records and internal control violations.

Universal

According to the SEC's complaint, between 2000 and 2004, Universal, in coordination with two of its competitors, Dimon, Inc. ("Dimon") and Standard Commercial Corporation ("Standard"), paid approximately $800,000 to bribe officials of the government-owned Thailand Tobacco Monopoly ("TTM") in exchange for securing approximately $11.5 million in sales contracts for its subsidiaries in Brazil and Europe. From 2004 through 2007, Universal also made a series of payments in excess of $165,000 to government officials in Mozambique through corporate subsidiaries in Belgium and Africa. Universal made these payments, among other things, to secure an exclusive right to purchase tobacco from regional growers and to procure legislation beneficial to the company's business. Between 2002 and 2003, Universal subsidiaries paid a total of $850,000 to high-ranking Malawian government officials. Universal did not accurately record these payments in its books and records.

Alliance One

From 2000 to 2004, in a coordinated bribery scheme with Universal, Dimon and Standard paid bribes of more than $1.2 million to government officials of the TTM in order to obtain more than $18.3 million in sales contracts. (In May 2005, Dimon and Standard merged to form Alliance One). Dimon characterized the payment of bribes to TTM officials as commissions paid to Dimon's agent in Thailand. Similarly, Standard personnel authorized improper payments to TTM officials and failed to record those payments accurately in Standard's books and records.

The SEC's complaint also alleges that, from 1996 through 2004, Dimon International Kyrgyzstan ("DIK"), a wholly-owned subsidiary of Dimon, paid more than $3 million in bribes to Kyrgyzstan government officials to purchase Kyrgyz tobacco for resale to Dimon's customers. Most of these payments were delivered in bags filled with $100 bills to a high-ranking government official. DIK also made improper payments to Kyrgyzstan tax officials.

Additionally, Dimon made improper payments to tax officials in Greece and Indonesia. Standard also made an improper payment to a political candidate and provided gifts, travel, and entertainment expenses to foreign government officials in the Asian Region, including China and Thailand. Dimon and Standard failed to record these payments accurately in the companies' books and records.

Without admitting or denying the SEC's allegations, defendants Universal and Alliance One consented to the entry of final judgments permanently enjoining each of them from violating the anti-bribery, books and records, and internal control provisions of the FCPA, codified as Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. Universal and Alliance One are ordered to pay disgorgement of $4,581,276.51 and $10,000,000, respectively, and each is ordered to retain an independent monitor for three years.

In related criminal proceedings announced today, the U.S. Department of Justice filed criminal actions against a Universal subsidiary and two Alliance One subsidiaries charging each of them with one count of conspiring to violate the FCPA and one count of violating the anti-bribery provisions of the FCPA. Universal and Alliance One have entered into non-prosecution agreements with the DOJ and agreed to pay criminal penalties of $4,400,000 and $9,450,000, respectively, and retain independent monitors for a period of three years.

Amybeth Garcia-Bokor, Paul Gumagay, Michael Hoess, Uta Von Eckartsberg, and Christine Neal conducted the SEC's investigation in this matter.

The SEC acknowledges and appreciates the assistance provided by the Department of Justice's Fraud Section and the Federal Bureau of Investigation.

Additional Materials:

• Litigation Release No. 21509 (SEC v. Elkin, et al.)

See Also: SEC Complaints v. Universal Corporation and Alliance One International