SEC also found the same execs in 2005 paid nearly $9.5 million to third-party consultants in four fake contracts later funneled to Montenegrin officials. This was pay off for helping Magyar buy Telekom Crne Gore.
All of this was to simply keep rival carriers out of the market. The three former execs that were charged under the Foreign Corrupt Practices Act by the SEC were Chief Executive Elek Straub, and strategy executives Andras Balogh and Tamas Morvai.
The charges that have been brought against these three gentlemen have since been resolved today. They have reached a settlement agreement to satisfy the U.S. Criminal and Civil probes into the bribery charges. The cost of keeping competition out, a little more than $95 million. Total pay out will be $64 million in criminal penalties assessed by the Justice Department and $31.2 million in civil penalty imposed by SEC. Neither Magyar nor Deutsche Telekom AG will face prosecution by the Justice Department if they can manage to comply with laws for the next two years. DT will shell out $4.36 million of the criminal penalty, Magyar will send a check for $49.6 million plus another $31.2 million is civil penalty imposed by SEC.
I bet that puts a small dent in their bank accounts. I wonder how much money they made since 2005 because of the bribes. Was it worth it?? I am glad AT&T and DT didn’t get this bright idea before they started the deal to buy T-Mobile, it might have happened.
Source: Reuters and Electronista
