Ford under pressure over Syria, Sudan business
Federal regulators in the United States have pressed Ford for information about its business in Syria and Sudan, which are under economic sanctions or other controls for being state sponsors of terrorism.
Ford said its operations in those countries are legal and not material to investors.
The Securities and Exchange Commission (SEC), in a letter to Ford dated July 5 but not released until Friday by the agency, said it appears from Ford’s website and media accounts that the company has operations in Sudan and Syria. It also said that Mazda, which is partly owned by Ford, has a presence in Iran and Syria.
“Your annual report does not include any information about these operations,” SEC division of corporation finance branch chief David R Humphrey said in the letter to Ford chief financial officer Don Leclair.
The letter asks the company to describe its past, current and future operations in the countries and whether Ford believes contacts there “constitute a material investment risk for your security holders”.
Ford responded in a letter dated July 18 that it has one authorised dealership in Syria, which opened in May. Ford contended it is legally allowed to sell products in Syria that contain less than 10% of United States-originated content, and it legally can do business with Syrian nationals who are not government officials.
US Treasury Department spokesperson Molly Millerwise said there is no general prohibition on a US company doing business in Syria.
American companies cannot do business in Iran or Sudan unless licensed or exempted from economic sanctions, she said.
The letter noted that several US government officials attended the grand opening of the Ford dealership in Syria, including representatives from the embassy in Damascus.
Ford said its Land Rover subsidiary has a contract with a distributor in the United Kingdom that sells vehicles in Sudan, and that Land Rover and Ford subsidiaries Volvo and Jaguar each has a dealership in Syria.
“These companies sell only products with less than 10% US content to their authorised dealerships,” the Ford letter said.
Ford addressed the question about Mazda by stating that the Japanese automaker is a separate legal entity from Ford, although Ford owns about a third of Mazda.
In 2005, Ford said it did about $50-million-worth of business in the countries cited by the SEC, a small percentage of its $177-billion in global revenues.
“We do not believe that a reasonable investor would deem this lawful activity material from a qualitative standpoint,” the letter said.
SEC spokesperson John Nester said on Friday that the agency reviews all company filings at least once every three years and often will ask for comments that result in changes or clarifications. He would not comment specifically on the request made of Ford.
Ford spokesperson Becky Sanch said she could not comment, and Mazda spokesperson Jay Amestoy said he had no comment.—Sapa-AP