CHINA: Lucent Execs face bribery charges in China and Saudi Arabia

Xinhua News Agency, 09 November 2004

BEIJING, Nov. 9 (Xinhuanet) -- Beijing's anti-graft investigators are expected to launch a probe into the multibillion-dollar deals Lucent Technologies and other foreign telecom equipment makers have secured to supply the country's vast telecom market.
Lucent Technologies, one of the biggest US telecom equipment makers, has reportedly turned over to investigators an 800-page report into possible violations of a US anti-corruption law involving its China operations.

South China Morning Post quotes sources as saying the anti-corruption bureau of the Beijing Municipal People's Procuratorate is having the report translated.

They believe investigators would use the report to launch a comprehensive probe of the country's whole telecom industry. Investigators are hopeful the report will provide the names of individuals and companies implicated in the violations.

Most of China's telecom companies are Lucent clients, including China Telecom, China Unicom and China Netcom. Some telecom officials and operators have allegedly received huge kickbacks for approving purchases of equipment worth hundreds of millions of US dollars from foreign and domestic makers.

Officials from Lucent's China operations said they were not aware of the report being handed to investigators, while the company's Asia-Pacific office declined to comment.

In April, Lucent Technologies announced it had dismissed four senior executives from its China operations for allegedly violating the US Foreign Corrupt Practices Act.

Copyright ©2004 Xinhua News Agency. All rights reserved.


S.E.C. considers suing ex-Lucent officers
The New York Times, 09 November 2004

By Ken Belson

Lucent Technologies, the nation's biggest telecommunications equipment maker, said yesterday that the Securities and Exchange Commission was considering suing three former executives over possible violations of the Foreign Corrupt Practices Act.

The executives include Richard A. McGinn, the former chairman and chief executive, and John Heindel, who ran Lucent's operations in Saudi Arabia. A third former employee was not named by Lucent in its filing with securities regulators.

The three are accused of violating antibribery rules, keeping inaccurate records and not having proper controls at the company's operations in Saudi Arabia. The violations reportedly occurred from 1997 to 2000, according to the filing.

In August 2003, Lucent said the Justice Department and the S.E.C. had started an investigation into the company's actions in Saudi Arabia. That step came after Lucent was sued by the National Group for Communications and Computers, a company based in Saudi Arabia that accused Lucent of bribing a Saudi minister to win a contract.

The government has not said whether it would take legal action against Lucent, the company said yesterday. The company said, however, that the S.E.C.'s investigation was continuing.

Mr. McGinn was the president and chief operating officer when Lucent was formed in 1996. In October 1997 he became chief executive, and five months later he was also named chairman. He left the company in October 2000 after the company's sales tumbled in the wake of the collapse of the technology bubble.

In April, Lucent fired four executives at its division in China after it was discovered that they might have violated bribery laws.

© 2004 The New York Times Company

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