April 24 - Reuters Correspondent Aruna Viswanatha talks about an SEC inquiry of at least 5 movie studios and their dealings with China.
Well it reads like one but this is no Hollywood movie scripts. Our borders exclusive says US regulators are investigating top movie studios they're dealings with Chinese Government officials and possible -- Investigators want to know if they grease the wheels to get their movies and to China when -- tinsel town's largest potential markets. Joining us with more is Reuters correspondent herb nab this when not who is in Washington and -- -- working on this story. -- this is quite a high profile probe just what are the allegations and how extensive is it. So what we know is. At the Securities and Exchange Commission in the past couple months to send out a bunch of letters until at least -- -- movie studios we think potentially more than that. I'm asking about their business in China saying that you know they're potentially looking in teen. On any undue influence. Any improper dealings with the Chinese Government in trying to get into the market so we know that this is an area they're looking and we don't quite know if they have found evidence that. Any drives were actually paid that we do know this is something they're looking. Okay well it seems the foreign corrupt practices act. Has snared a number of high profile companies and probes. With Wal-Mart Mexico the most recent target. We say the US government is launching a major crackdown on companies with dealings overseas. I -- definitely. The past four or five years every year we've seen sort of record penalties in the billions of dollars. That the Justice Department and the SEC have collected in knees for encrypt practices that frozen. It's definitely a very hot area of enforcement for them. And I don't see that. Slowing down any time and seen what will interfere with. Any inroads Hollywood has Maine and doing business with China. You know it's an interesting question and the SEC has done these kinds of sweeps in the past where immediate finds. A reason to be concerned about one company and then it thinks maybe this is an industry wide problem and we should look. Sort of a cross at other companies in that industry. And you know these things take a really long time to play out so. We may not even know if they find any evidence of problems for another year to end. Because these things takes a lung I don't know if they will have an eastern immediate business impact but it seems like it's definitely something companies are gonna have to be concerned about. When there trying to build business in China well will we see the SEC pursue more high profile companies in the future. Do you think this is the entertainment industry is at risk. Yes it's it's sun we haven't really seen that many cases in the entertainment industry mean historically. A lot of companies say and I get caught up in at CP investigations are sort of the traditional. Meaning defense contractors -- oil and gas companies that deal a lot with foreign governments. But I think as sort of businesses get more global and as Hollywood kind of pushes outwards they -- also. Running up against. Some of these concerns and answer as they push more into these markets I think it's going to be -- bigger issue. Our thanks to British correspondent Byron Davis not I'm putting mom this is Richard.