Business

Alcatel-Lucent pays $137m to settle US bribery case

 

Telecoms equipment giant Alcatel-Lucent will pay $137m (£88.7m) to settle US charges that it paid bribes to win Latin American and Asian contracts.

The French-based firm was accused of bribing government officials in Costa Rica, Honduras, Malaysia and Taiwan.

The US Justice Department said the bribes were paid by Alcatel before it bought US-based company Lucent Technologies in 2006.

The Securities and Exchange Commission said Alcatel's controls were "lax".

Alacatel-Lucent had already made provision for the settlements in 2009 and said the cost would not affect its 2010 results.

The news boosted the firm's shares, which rose as high as 1.8% in thin trading, making it one of the biggest gainers on the Paris stock market.

'Sham' consultants

The SEC said Alcatel's subsidiaries "used consultants who performed little or no legitimate work to funnel more than $8m in bribes to government officials in order to obtain or retain lucrative telecommunications contracts".

The payments, made between December 2001 and June 2006, were either undocumented or improperly recorded as consultancy fees, the US authorities said.

The head of the SEC's enforcement division, Robert Khuzami, said Alcatel and its subsidiaries had failed to investigate numerous "red flags" indicating that some employees were using "sham consultants".

"Alcatel's bribery scheme was the product of a lax corporate control environment at the company," he added.

US officials said Alcatel had admitted earning about $48.1m in profits as a result of the payments.

Alcatel agreed to pay $92m to settle criminal charges brought by the Justice Department under the US Foreign Corrupt Practices Act, plus a further $45m to settle civil charges brought by the SEC.

The violations came to light following a joint investigation by agencies in the US, France and Costa Rica.

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