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US: Coke Pays Off Whistleblower

October 8th, 2003

Coca-Cola has agreed to pay $540,000 to a former employee who claimed the company inflated its profits and knowingly sold contaminated drinks. The company agreed the out of court settlement with former finance manager Matthew Whitley, who sued Coca-Cola for unfair dismissal.

Mr Whitley lost his job one month after making his whistleblowing allegations.

The company had consistently rubbished the claims and asked for them to be thrown out of court as "frivolous".

Faked research

Mr Whitley's allegations led the US Department of Justice to launch a criminal probe into the affair, which is still ongoing.

The former finance manager claimed Coke had inflated its earnings and that managers knew that frozen drinks machines led to metal residue entering some of its products.

Some of Mr Whitley's claims, including an accusation of a conspiracy to cheat shareholders, had already been thrown out of a US court in Georgia.

But Coke did confess to one of the allegations, admitting that its employees had rigged a marketing test in order to increase sales at Burger King.

Coke apologised to Burger King for faking the research and agreed to pay $21m (12m) in compensation.

"It's become increasingly clear to me that the company has taken seriously the issues I raised," Mr Whitley said in a statement, following the settlement.

"That's all I ever wanted."

Coke says that a toxicology study has found there is no health risk to consumers if there was metal in its drinks.

Both Mr Whitley and Coke said they would continue to cooperate with the federal investigations.

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