Malaysia to probe Alcatel Lucent bribe allegations

Incumbent Malaysian carrier Telekom Malaysia and Axiata Group, a company it was formerly integrated with, have commenced probes into allegations that state officials accepted massive bribes from networking vendor Alcatel Lucent's Malaysian subsidiary.

In court filings released by the US Securities and Exchange Commission (SEC) last week, it was alleged that Alcatel Lucent Malaysia personnel had - between 2004 and 2006 - paid two Malaysian consultants US$200,000 and US$500,000 which resulted in the vendor winning a Telekom Malaysia contract worth US$85 million.

Telekom Malaysia and Axiata on Monday jointly appointed KPMG and Shearn Delamore & Co respectively as forensic accountants and legal advisors for an internal probe into the allegations.

The scale of the alleged bribery in Malaysia, however, paled in comparison to that for which Alcatel Lucent last week agreed to pay US$137 million to the SEC and the US Department of Justice.

Meanwhile, Australian Prime Minister Julia Gillard has brushed aside concerns raised that the lax corporate culture that led to Alcatel Lucent business practices would impact the operations of Australia's NBN Co.

NBN Co chief Mike Quigley and chief financial officer Jean-Pascal Beaufret were both senior executives at Alcatel Lucent during the period of the alleged bribes, however neither have been implicated in the allegations.

Gillard labelled Opposition Leader Tony Abbott's suggestion that the NBN Co under Quigley and Beaufret would be run in a similar fashion to Alcatel Lucent as a "personal smear".

The sum of last week's fine would have come as no surprise to Alcatel Lucent which detailed in its 2009 annual report that it had already struck an in-principal agreement with the DoJ and SEC [PDF] to pay a total of US$137 million over the bribery allegations.