Deutsche Telekom CEO faces bribery probe

Deutsche Telekom’s chief executive, Ren© Obermann, is being investigated by the German authorities over allegations that its Balkan units paid bribes. Eight people, including non-Telekom workers, are being investigated.

According to the Deutsche Telekom, the investigation into the eight people came in response to a request for legal assistance from the US authorities in connection with suspected acts of bribery in Macedonia and Montenegro.

The company feels that it had fully co-operated with the US investigation, which has been underway for five years, and that Mr Obermann had assisted as a witness in 2009.

According to Deutsche Telekom, no allegations have been made against the CEO personally at any stage of the US investigation.The CEO, Rene Obermann has rejected the criminal allegations made against him as false.

According to Manfred Balz, Deutsche Telekom’s board member for legal affairs and compliance, prosecutors in the company’s hometown of Bonn, allege that in 2005 Mr Obermann linked his approval of dividend payments in Macedonia to shelving of telecoms deregulation there. The company is at a complete loss to say how this conclusion got in there.

Magyar Telekom, the Hungarian telephone company controlled by Deutsche Telekom, in 2006 discovered apprehensive payments made during last year by a unit in Montenegro and its Makedonski Telekom subsidiary in Macedonia.

As the company was then listed in the US, Deutsche Telekom informed the US Securities and Exchange Commission that subsidiaries may have violated the US ban on bribing foreign officials, and hired the US law firm White & Case to investigate.

The law firm’s reported in late 2009, highlighted US$9 million in doubtful contracts in Montenegro and a further with Macedonia. But the report claimed that there was no senior of Magyar Telekom and no Deutsche Telekom officials were involved.

According to Mr Balz, the prosecutors searched his flat, but they took nothing and left the place as they had found it. He’s on the list of suspects, although the company hopes he will shortly be needed only as a witness.

According to Deutsche Telekom, prosecutors claim Mr Obermann told a MakTel executive in 2005 that his shareholders including the Macedonian government would get a big dividend if plans to deregulate the country’s telecoms market were shelved.