TM: KPMG to continue probe into Alcatel issue

  • Business
  • Thursday, 03 Feb 2011

PETALING JAYA: Telekom Malaysia Bhd (TM) said KPMG Corporate Services Sdn Bhd will continue investigations and a forensic audit to identify TM employees who took bribes from Alcatel Lucent SA's unit to help Alcatel Lucent secure a contract.

In a Bursa Malaysia filing, the company said KPMG's investigations came under the supervision of TM special affairs unit of TM Group internal audit division reporting to the board of audit committee (BAC).

It added that the board sub-committee, which was formed to conduct an independent internal investigation into the bribery allegations, was dissolved yesterday as its primary objective was achieved.

TM said that the report of the findings to date would be handed over to the Malaysian Anti-Corruption Commission (MACC) by the end of this month.

MACC began investigations into graft allegations when the US Securities and Exchange Commission (SEC) and Justice Department fined Alcatel Lucent US$137mil (RM420.6mil) for a global bribery case.

It was found that Alcatel Lucent had given bribes to government officials to win or keep multi-million dollar contracts between 2001 and 2006. The countries involved included Malaysia, Taiwan, Costa Rica and Honduras.

Documents made public by the SEC and Justice Department late last year alleged that the French equipment supplier paid bribes to TM employees in exchange for non-public information.

The information provided to Alcatel Lucent included important documents and budget information relating to ongoing bids and competitor pricing information, which it is alleged to have helped Alcatel Lucent win a US$85mil contract.

The contract is said to be for equipment under Celcom's 3G phase two rollout in 2006. Celcom was then under the TM Group but is now part of Axiata Group Bhd after the de-merger of the mobile business from TM in 2008.

Alcatel and two other international vendors lost out for the first phase of the 3G deployment as it went to Nokia Networks Malaysia and China's Huawei Technologies.

The SEC alleged that two Malaysian consultants received kickbacks of up to US$500,000 for providing market research.

Following this revelation, both TM and Axiata jointly appointed KPMG as forensic accountants to help in an internal probe.

Meanwhile, Axiata said in a filing yesterday that it had concluded the internal investigation, which started on Jan 4.

“Investigations by KPMG (forensic accountants) and Shearn Delamore & Co (legal advisor) were performed as exhaustively as possible within the constraints of information made available by third parties,” it said.

Axiata added that the finding would be tabled to the board of directors and handed over to MACC subsequently by end-February.

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