SEC wants Ford to provide data on Syria, Sudan business

Federal regulators have pressed Ford Motor Co. for information about its business in Syria and Sudan, which are under economic sanctions or other controls for being alleged state sponsors of terrorism.

Ford said its operations in those countries were legal and immaterial to investors.

The Securities and Exchange Commission, in a letter to Ford dated July 5 but not released until Friday by the agency, said that it appeared from Ford’s website and news media accounts that the company had operations in Sudan and Syria.

It also said that Mazda Motor Corp., which is part-owned by Ford, had 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 Don Leclair, Ford’s chief financial officer.

The letter asks the company to describe its past, current and future operations in the countries and disclose whether Ford believes contacts there “constitute a material investment risk for your security holders.”

Ford responded in a letter dated July 18 that it had one authorized dealership in Syria, which opened in May.

Ford contended that it was legally allowed to sell products in Syria that contained less than 10% of U.S.-originated content, and that it legally could do business with Syrian nationals who were not government officials.

Treasury Department spokeswoman Molly Millerwise said there was no general prohibition on a U.S. company doing business in Syria.

American companies cannot do business in Iran or Sudan unless licensed or exempted from economic sanctions, she said.

Ford said that its Land Rover subsidiary had a contract with a distributor in Britain that sells vehicles in Sudan, and that Land Rover and Ford subsidiaries Volvo and Jaguar each have a dealership in Syria.

“These companies sell only products with less than 10% U.S. content to their authorized dealerships,” the Ford letter said.

Ford addressed the question about Mazda by stating that the Japanese automaker was 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 revenue.

“We do not believe that a reasonable investor would deem this lawful activity material from a qualitative standpoint,” the letter said.

SEC spokesman John Nester said Friday that the agency reviews all company filings at least once every three years and often would ask for comments that result in changes or clarifications.

Nester declined to comment specifically on the request made of Ford.

Neither Ford nor Mazda would issue a comment.