Alcatel admits to bribing government officials

FINED: The Alcatel headquarters in Paris. Alcatel has agreed to pay more than RM144mil to settle the US Securities and Exchange Commission charges that it had paid bribes to foreign government officials to illegally win business in Latin America and Asia. - AP

NEW YORK: Alcatel-Lucent SA has agreed to pay more than US$137mil (RM438mil) to settle charges brought against it by the federal government.

The Securities and Exchange Commission (SEC) accused the Paris-based maker of telecommunications gear of paying bribes to foreign government officials to illegally win business in Latin America and Asia.

Alcatel, a top supplier to US and European phone companies, agreed to pay more than US$45mil  to settle the SEC's charges. It will pay an additional US$92mil to settle separate criminal charges announced by the Justice Department.

The SEC's complaint said Alcatel's bribes went to government officials in Costa Rica, Honduras, Malaysia and Taiwan between December 2001 and June 2006. Alcatel bought US-based Lucent Technologies at the end of 2006.

"We take responsibility for and regret what happened and have implemented policies and procedures to prevent these violations from happening again," said Steve Reynolds, the company's general counsel.

The SEC complaint, filed on Monday in US District Court in Miami, said all of the bribery payments were undocumented or improperly recorded as consulting fees by Alcatel subsidiaries and then consolidated into the company's financial statements.

The complaint also says leaders of several Alcatel subsidiaries and geographical regions either knew or were severely reckless in not knowing about the misconduct.

"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, director of the SEC's division of enforcement, said in a statement.

The settlement is subject to court approval.

A year ago, Alcatel created a reserve for the settlement of US$127mil. As a result, the company said, the settlement won't affect this year's results.

Last month Alcatel reported income of US$35mil (RM112mil) on revenue of US$5.8bil for the third quarter after losses last year, helped by recovering demand for wireless and growth in Asia and eastern Europe. - AP