Deutsche Telekom charged by SEC in corruption case

Reuters News
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Posted: Dec 29, 2011 10:08 AM
Deutsche Telekom charged by SEC in corruption case

(Reuters) - Deutsche Telekom AG, a Hungarian unit and three former executives were charged by a U.S. regulator with bribery involving government officials in Macedonia and Montenegro.

The U.S. Securities and Exchange Commission said executives at the company's Magyar Telekom unit arranged the payment in 2005 and 2006 of about 4.88 million euros to Macedonian officials to keep a competitor out of the market and obtain regulatory benefits.

According to the regulator, the same executives in 2005 arranged a second scheme in which 7.35 million euros were paid to third-party consultants under four sham contracts, with the expectation that some of the funds would be funneled to Montenegrin officials to help Magyar complete an acquisition.

The SEC also filed charges against the three former Magyar Telekom executives: former Chief Executive Elek Straub, and strategy executives Andras Balogh and Tamas Morvai.

It alleged violations of the Foreign Corrupt Practices Act, noting that both Deutsche Telekom and Magyar Telekom are U.S. issuers that had filed reports with the commission. The SEC filed its charges in a federal court in New York.

(Reporting by Jonathan Stempel in New York, editing by Dave Zimmerman)