Monsanto Dealings in Indonesia Investigated

Justice Widens Monsanto Indonesian Probe

March 22, 2004 1:21:00 PM ET
By Carey Gillam
http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20040322&ID=3514290

KANSAS CITY, Mo. (Reuters) - U.S. authorities have widened
an investigation into whether Monsanto Co. (MON.N.) engaged
in improper business dealings in Indonesia, the company said
on Monday.

The new issue is whether a former outside consultant to
Monsanto made an improper $50,000 payment in early 2002 to
an Indonesian government official at the direction of a
former Monsanto employee, the company said.

Both the U.S. Department of Justice and the Securities
and Exchange Commission were already looking into issues
involving Monsanto's work in Indonesia.

"their particular inquiry,'' said Monsanto spokeswoman Lori
Fisher. "These are serious allegations and we will continue
to cooperate.''

She said the employee involved has left the company, but
declined to provide further details.

Potential problems in Indonesia first surfaced when the
St. Louis-based agrochemical company disclosed to regulators
in November 2002 that an internal audit and review by management
had uncovered compliance irregularities in Indonesia, where
the company has been losing money the last few years.

The company is one of the world's leading developers of
genetically modified seeds, but has had trouble getting some
of its biotech crops approved in foreign countries, including
a biotech cotton introduced in Indonesia in 2001.

Monsanto closed down the biotech cotton sales operations in
2003 after two unsuccessful years that came amid complaints
over yields and pricing.

Today, the company's business in Indonesia is confined to
herbicide sales and conventional corn seed sales and the country
is a relatively small contributor to overall revenue.

Net combined revenue from Indonesian customers represents
only about 0.8 percent of total corporate revenue of $5 billion,
the company said.

Monsanto shares were down 1.6 percent at $33.69 on the New
York Stock Exchange on Monday afternoon.

© 2004 Reuters