Saudi Firm Sues Lucent for Bribery

Battle of the baksheesh? Saudi Arabian telecom operator called Silki La Silki says Lucent greased a few palms

August 12, 2003

2 Min Read
Saudi Firm Sues Lucent for Bribery

A Saudi Arabian telecom company is accusing Lucent Technologies Inc. of bribery in a lawsuit, setting the stage for a transcontinental legal battle.

Tough to pick a favorite, eh?

The National Group for Communications & Computers (NGC), now known -- seriously -- as Silki La Silki National Telecommunications, says Lucent bribed a state official in the late 1990s to win networking business with Saudi Telecom Co. (STC).

The lawsuit was filed against Lucent in U.S. District Court for the Southern District of New York. It says Lucent paid $15 million in bribes to Ali Al-Johani, a former minister of Saudi Arabia's Ministry of Post Telephone and Telegraph.

The suit charges that Al-Johani received money, payment of medical expenses, and free use of private jets between 1995 and 2002. In return, he allegedly encouraged the STC, which his office oversaw during its privatization in 1998, to make decisions in favor of Lucent.

Lucent profited a great deal in the late 1990s through 2001 from its relationship with STC. In a June 1998 press release, Lucent announced it had been awarded two contracts with STC valued at a total of $810 million. STC spent $699 million on Lucent gear to build its GSM mobile phone network. Lucent was also awarded a $111 million contract to modernize STC's telephone switch systems, covering more than 900,000 telephone lines.

More Lucent/STC contracts, totaling over $400 million, followed in 2001 for fixed network expansion, optical networking, data infrastructure, and GSM equipment.

Lucent declined to comment on details of the lawsuit.

“We are studying the suit,” says Mary Ward, a spokewoman for the company. “And we’ll defend ourselves vigorously. Beyond that I don’t have any further comments.”

Lucent was trading up $0.01 (0.56%) to $1.81 today.

— Marguerite "La Silki" Reardon, Senior Editor, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like