Alcatel-Lucent will pay $137 million to US authorities in settlement charges in a bribery case to win contracts in Asia and Latin America.
The French telecom giant was accused of bribing government officials in Taiwan, Malaysia, Costa Rica and Honduras. Alcatel had paid the bribes before it acquired the US based Lucent in 2006, said the Justice Department.
The Securities and Exchanges Commission (SEC) blamed Alcatel of following ‘lax’ control procedures. However, the charge will not affect the company’s financial performance for the year 2010, since it had already made provisions for the same in 2009, said the company in an announcement.
The news of the verdict boosted the company’s shares by 1.6% in Paris stock exchange.
In its order the SEC said Alcatel’s overseas units “used consultants who performed little or no legitimate work to funnel more than $8m in bribes to government officials in order to obtain or retain lucrative telecommunications contracts”.
In an attempt to cover its trails, payments made between December 2001 and June 2006, were either not documented or recorded as consultancy fees, authorities claimed.
Blaming that the company and its subsidiaries were using ‘sham consultants’; the head of SEC’s enforcement division Robert Khuzami blamed the company for failing to detect numerous ‘red flags’. “Alcatel’s bribery scheme was the product of a lax corporate control environment at the company”, he said.
Alcatel had admitted of making $48.1 million in profits from these contracts, US officials said. The violations came to light after joint investigations were taken up by Costa Rica, France and the US.
Alcatel agreed to pay $45 million in settlements to charges brought about the SEC and $92 million in settlements to the criminal charges brought by the Justice Department under US Foreign Corrupt Practices Act.