ALCATEL-LUCENT has been blacklisted for 12 months.
Axiata Group and Telekom Malaysia Bhd (TM) will avoid dealing with them till early next year. This ban affects both the international company, Alcatel-Lucent SA, and the Malaysian operations, Alcatel-Lucent Malaysia Sdn Bhd.
Alcatel has a big office at Wisma Denmark, Kuala Lumpur, and a pool of engineers, some of whom are expatriates. Internally, they must be counting their lucky stars that it is only 12 months, not 12 years, or else they may have to pack and return to France.
Other vendors who find Alcatel a challenger must be rejoicing as it is one vendor out of the race at a time when telcos/celcos are preparing for the next-generation network awards.
To recap, two days after Christmas last year, the international bribery scandal involving Alcatel broke out. The French giant, to avoid prosecution, decided to pay US$137mil to settle US charges that it paid millions of dollars in bribes to foreign officials to win and maintain contracts in Costa Rica, Hondurus, Taiwan and Malaysia.
The documents released by the US Department of Justice and Securities Exchange Commission (SEC) stated that Alcatel paid improper payments to secure contracts with Celcom Axiata Bhd, a unit of Axiata Bhd. Then, Celcom was a unit of TM and it awarded a telecoms contract to Alcatel that ended in 2009. The bribes totalled US$700,000 and were paid between 2004 and 2006 to consultant A and B. No details are available as to who these consultants are but purportedly said to be TM employees. They got paid off for supplying information on competitor's pricing.
After the scandal broke out, Malaysian Anti-Corruption Commission (MACC) had to jump in to investigate and the agency literally housed itself in TM and Alcatel for several days to weeks, interviewing dozens of people and fine-combed tonnes of documents to nab the culprit. At the same time, TM and Axiata conducted their own internal investigations.
In all these investigations, it would be good to see if there was any potential conflict of interest.
This week, MACC suggested that vendors who pay bribes be blacklisted and both TM and Axiata jumped in to blacklist the French company.
But the story does not end here.
The giver has been punished and the question on many people's lips is if any evidence has been unearthed to nab the takers those who took or shared the US$700,000. Will they be brought to the book or will this be hushed-up and some people get away scot-free? The names of the consultants are awaited by some with abated breadth.
For one, MACC has not finished its investigations and may announce more details next week or the coming weeks. The men are still at work and we just need to be patient.
Punishing Alcatel and making sure it does not have new business for a year or so can be bad for the company, but will it deter others and prevent a similar episode?
In Alcatel's case, it had to swallow the bitter pill for what it did. Why this bribery case happened is because there is a precedent set in the industry. It is a global thing in the world of telecoms some expect, some like to give, some ask.
Can it be prevented in the future?
A vendor representative says there is a need for greater transparency at all levels of the tender process from the technical evaluations right up to the commercial bidding and if no one takes, no one will give.
Another said: “To stop the spiral of cronyism and corruption and not let things build up until there are ugly consequences for our leaders, the Government and the nation, we need to call for open and transparent tender processes for all procurement for government-linked companies and government departments and agencies.''
Talk is cheap but execution is tough. However, if we are serious, then we have to prevent abuse and curb corruption at every step of the way. And if we need to learn from others, we should, as we can easily borrow some of SEC's books and force a rigorous audit process. That will get us somewhere or we can just sit down and do damage control every time it happens. The choice is really in our hands.