Al­ca­tel-Lu­cent to pay $137 mil­lion in bribery case

The Pak Banker - - Company& -

NEW YORK: Al­catelLu­cent SA re­solved U.S. crim­i­nal and civil probes into al­le­ga­tions that it paid bribes in Costa Rica, Tai­wan and Kenya by agree­ing to pay $137 mil­lion.

Pros­e­cu­tors yes­ter­day charged Paris-based Al­catelLu­cent with vi­o­lat­ing the in­ter­nal con­trols and books and records pro­vi­sions of the For­eign Cor­rupt Prac­tices Act. The Jus­tice Depart­ment will de­fer pros­e­cu­tion and drop the case af­ter three years if the com­pany im­proves its com­pli­ance pro­gram as promised.

Al­ca­tel-Lu­cent, the world's biggest sup­plier of fixed-line phone net­works, will pay a $92 mil­lion crim­i­nal penalty.

Three sub­sidiaries will plead guilty to anti-bribery pro­vi­sions of the FCPA, ac­cord­ing to the Jus­tice Depart­ment. The com­pany also will pay $45 mil­lion to set­tle civil charges filed by the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion.

"Al­ca­tel and its sub­sidiaries failed to de­tect or in­ves­ti­gate nu­mer­ous red flags sug­gest­ing their em­ploy­ees were di­rect­ing sham con­sul­tants to pro­vide gifts and pay­ments to for­eign govern­ment of­fi­cials to il­le­gally win busi­ness," Robert Khuzami, SEC en­force­ment di­rec­tor, said in a state­ment.

Three sub­sidiaries-Al­catelLu­cent France SA, Al­catelLu­cent Trade In­ter­na­tional AG and Al­ca­tel Cen­troamer­ica SAwill plead guilty, ac­cord­ing to the de­ferred-pros­e­cu­tion agree­ment filed yes­ter­day in fed­eral court in Mi­ami.

Al­ca­tel "pur­sued many of its busi­ness op­por­tu­ni­ties around the world through the use of third-party agents and con­sul­tants," ac­cord­ing to a state­ment of facts ad­mit­ted by the com­pany in de­ferred-pros­e­cu­tion agree­ment.

A de­cen­tral­ized cor­po­rate struc­ture also per­mit­ted cor­rup­tion, as "the lo­cal em­ploy­ees were more in­ter­ested in ob­tain­ing busi­ness than en­sur­ing that busi­ness was won eth­i­cally and legally," the com­pany ad­mit­ted. -Bloomberg

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