x
Optical/IP

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

Page 1 / 4   >   >>
Belzebutt 12/4/2012 | 11:36:06 PM
re: Saudi Firm Sues Lucent for Bribery Isn't that just how things work over there?
dodo 12/4/2012 | 11:36:06 PM
re: Saudi Firm Sues Lucent for Bribery Could it be that it happened during Carly's watch?
dodo 12/4/2012 | 11:36:05 PM
re: Saudi Firm Sues Lucent for Bribery In the Defense Trade they use "INDIRECT OFFSETS" to get business
PackMan 12/4/2012 | 11:36:04 PM
re: Saudi Firm Sues Lucent for Bribery ... that U.S. companies can sue the *multitudes* of foreign companies that practice exactly these tactics to keep U.S. companies out of their markets?

Somethings tells me it won't work both ways.

This could be a *really* interesting battle. LR please keep us informed!
russ4br 12/4/2012 | 11:36:03 PM
re: Saudi Firm Sues Lucent for Bribery Guess no one told Carly about the Foreign Corrupt Practices Act.....

(A) Any natural person that is an officer, director, employee, or agent of a domestic concern, or stockholder acting on behalf of such domestic concern, who willfully violates subsection (a) or (i) of this section shall be fined not more than $100,000 or imprisoned not more than 5 years, or both


5 years, definitely!


- russ
Irishboy 12/4/2012 | 11:36:03 PM
re: Saudi Firm Sues Lucent for Bribery Guess no one told Carly about the Foreign Corrupt Practices Act.....

(A) Any natural person that is an officer, director, employee, or agent of a domestic concern, or stockholder acting on behalf of such domestic concern, who willfully violates subsection (a) or (i) of this section shall be fined not more than $100,000 or imprisoned not more than 5 years, or both.
stephenpcooke 12/4/2012 | 11:36:02 PM
re: Saudi Firm Sues Lucent for Bribery "Isn't that just how things work over there?"

If you read only a few of the articles listed on the Light Reading site (eg: Ceyba Closes, MCI..., etc.) perhaps one can say that they are not so differnt than we are. At least the Saudi's reported the bribery. How many 'sets of gold clubs', select seats at major sporting events, etc. find their way into carrier executive's hands?

The Lucent's of the world do this on a regular basis, and it is not just Lucent. Remember those $1BUSD deals that happened a few years ago? Remember those $1.X Billion 'defensive' acquisitions? It is extremely easy to add numbers that are an order of magnitude below X in order to make the deal happen the way your big corporation wants it to. That can be, and was frequently I'm sure, in the 10's of Millions of dollars. That would be one nice set of golf clubs...

We look at other cultures down our noses with a mindset that our system is the most ethical and moral. Guess what, one of those cultures has just shown us that it is our culture that is immoral and unethical.

What all entrepreneurs should realize from items like this is that it is not just fancy technology or purported OPEX/CAPEX savings that sells products... In an ideal world, yes these things should be sufficient. When the numbers get sufficently large, they attract a wider audience of not-so-ethical players who may have deep pockets and aren't afraid to use them...

The point is: entrepreneurs who are hoping for the big sale to get them where they need to be, have to consider where the deep pockets are looking and if they are going to be in on the bid. If they are it is a whole new ballgame.
skeptic 12/4/2012 | 11:36:01 PM
re: Saudi Firm Sues Lucent for Bribery
- NGC was a Lucent subcontractor on Saudi
Contracts. The company is itself tied into
the saudi government in a big way. I would
tend to question its motives.

- NGC's subcontract got terminated. The case
is as much about NGC getting paid for the lost
subcontract as it is for bribary.

- The "bribes" in this case involved paying
for cancer treatment in the US, trips by family
to the US and a donation to a cancer research
center made by Lucent in the name of a Saudi.

So on one side you have a local subcontractor
who was probably getting tens of millions of
dollars complaining about bribary. And on the
other, you have a guy suffering with cancer
who got a few million dollars to make his
life easier.

I would guess that this is really about someone
not getting what they considered their fair
share. And that the case is more
about creating enough embarrasment to Lucent
and the US & Saudi governments that someone
fixes the situation.

(The above information is from articles in
the rocky mountain news and the Chicago
Daily Herald.)






lastmile 12/4/2012 | 11:36:00 PM
re: Saudi Firm Sues Lucent for Bribery Bribery in Saudi Arabia is a way of life.
maddog 12/4/2012 | 11:35:59 PM
re: Saudi Firm Sues Lucent for Bribery The original Lucent Saudi deal was signed by Bob Allen (AKA Norman Bates) prior to divesture. I am more than a little surprised that any Saudi firm would want to air all their dirty laundry in a U.S. court. NGC had a number of subcontracts for such things as Road Side Emergency terminals and Subscriber Radio Systems. This is just another indication that the political powerbase in KSA is in termoil/changing.
Page 1 / 4   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE