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ZTE and Huawei execs get ten years for bribery

Sentenced in their absence by Algerian court

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Huawei and ZTE suffered a PR blow this week after it emerged that executives from the company had been convicted of bribery offences in Algeria and sentenced in their absence to ten years each in jail.

Local French language news site Presse-DZ reported that international arrest warrants had been issued for ZTE's Dong Tao and Chen Zhibo and Huawei's Xiao Chunfa.

A fine of three million dinars (£25,117) each was also levied and the firms were banned from public tenders for two years as punishment for “corruption and influence peddling”.

The three were charged as part of a wider corruption scandal involving former Algérie Télécom exec Mohamed Boukhari, and businessman Chami Madjdoub who were given a sentence of 18 years in jail and fined five million dinars after receiving suspicious payments and money laundering between 2003-6.

The report alleges that the ZTE and Huawei execs effectively bribed Boukhari by paying $10m (£6.5m) into offshore accounts set up by Madjdoub. The Shenzhen headquartered telecoms kit makers both expressed concern at the news.

ZTE said it was looking into the court’s decision, while Huawei sent the following short statement: “We take this matter very seriously and we are currently reviewing the court’s decision.”

The decision will not be welcome, given the two companies' ambitions to expand beyond China. Achieving offshore growth has already been made harder by a European Trade Commission case started after allegations they received illegal state subsidies.

ZTE and Huawei have also received negative press in the past after being accused of selling technology to help the repressive Iranian regime.

Huawei in particular has been given a rough ride by the US government, which has been vocal in raising national security concerns about the company over links between founder Ren Zhengfei who served in the People’s Liberation Army.

Most recently the Australian government apparently banned Huawei from submitting tenders for the National Broadband Network project. ®

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