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Loral And U.S. Government Settle 1996 Chinese Launch Matter
New York - Jan 11, 2002 Loral Space & Communications has reached a settlement with the U.S. government in a case relating to the company's involvement in a review of a Chinese rocket launch failure in 1996. Loral was informed by the Justice Department has terminated its investigation of the company and has declined to pursue the matter further. Loral has agreed to pay a civil fine of $14 million to the State Department without admitting or denying the government's charges. The cost of the fine (approximately $0.04 per share) will be reflected in Loral's 2001 fourth quarter results. Under the terms of the agreement the fine is to be paid over seven years, without interest, resulting in a cash impact annually of approximately $2 million. Loral also has strengthened its export compliance program. The company's past and future compliance costs, as agreed to with the government, will total at least $6 million, $2 million of which has already been expensed. Loral's chairman and chief executive officer, Bernard L. Schwartz, said: "Loral and its employees are patriotic, law-abiding citizens and we take this matter very seriously. We historically have had an excellent security record and are committed to vigorous compliance with export control laws. The company has instituted an extensive new training program, significantly expanded staff, and greatly improved oversight in the area of export control.
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