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Deutsche Telekom CEO questioned over bribery claims

Company accused of oiling regulatory wheels

Internet Security Threat Report 2014

German prosecutors searched the home of Deutsche Telekom CEO Rene Obermann in August, it has emerged, and have questioned staff about alleged bribes paid in the form of dividends to stifle Macedonian competition.

The investigation was kicked off in 2007 by the US Securities and Exchange Commission, which were tipped off when PwC refused to sign off accounts for a company called Magyar Telekom, having discovered what it considered dubious payments. An internal investigation led to Macedonia, and Makedonski Telekom, of which Magyar Telekom owns 51 per cent. Deutsche Telekom, in turn, owns almost 60 per cent of Magyar Telecom.

The arrangement is alleged to have been thrashed out in 2005, during a meeting between Obermann and the chief executive of Makedonski Telekom, with the intention of bribing regulators to forestall competitors, the BBC reports. The company and Obermann have denied any wrong doing.

During the internal investigation Magyar suspended a handful of staff, who have since resigned, but the US investigation is ongoing. That investigation led to the German prosecutor being asked to assist, and thus to the homes of several Deutsche Telekom employees being searched.

It would be a near-omniscient CEO who was aware of underhand practices carried out by a handful of employees at the subsidiary of a subsidiary, and given that VIP MKD launched a GSM service in Macedonia two years later any bribes that were offered obviously didn't work.

But having the rozzers wandering around one's home is unpleasant at the best of times, even if one happens to be innocent. ®

Internet Security Threat Report 2014

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