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We have just read in the newspapers that TM and Axiata, our government-linked telecommunication companies have banned Alcatel-Lucent, a French telecommunication vendor from participating in tenders,contract and joint ventures for one year. The international vendor was found by the United States Department of Justice and Securities Exchange Commission to be involving in corrupt practice in certain countries including Malaysia in procuring and maintaining telecommunication contracts.

Apparently Alcatel-Lucent paid USD 700,000 (about RM2.1mil) to consultant A and B to get the contract in 2004 from Celcom which was a unit of TM before the de merger. The company (Alcatel-Lucent) paid fines amounting to more than USD130 mil as the result. The giver has now been punished, what about the recipients? I hope MACC will leave no stone unturned as to get these scum who abused their positions to enrich themselves without giving a thought about the implications of their corrupt practice to the industry and more so to Malaysia.

The recipients of the bribe have put our country to shame in the eye of the world. No wonder the Foreign Direct Investment (FDI) to our country started to drop when this kind of practice came to the knowledge of international investing community. This was, by the way, during the tenure of the flip flop sleepy PM Bodohwi ( I feel nauseous mentioning this man’s name) with all his arrested reforms!

Now this Alcatel-Lucent managed to get the contract on supplying Celcom’s 3G technology ending in 2009, through the back door so to speak because they got hold of their competitor’s pricing through the corrupt ( most likely) TM officers.

Do you think Alcatel are not going to get back “their USD700,000 investment?” Don’t be naive. They could give inferior service,cheaper less quality spare parts, they could delay planned preventive maintenance, they could give less personnel to attend to problems, in fact they could do anything that do not fulfill the agreed specifications as those who receive the bribe will come to their defense should there be complaints against them. This is a simplistic way of putting it but you all smart people would understand what I am getting at.

Corruption stinks! As it does not only increase the cost of doing business but it traps those who involve in this scourge in a culture of mediocrity and substandard quality and of course greed. If not nipped in the bud, it would grow bigger and eventually affecting the company and the investors. Just because it is a GLC, it doesn’t mean that it is going to be okay because poor quality hardware will affect customers’ loyalty leading to a decline in income/profit and investors’ disillusion and pulling out.

Had it not been for the American findings, the corruption in TM would have been swept under the carpet. It is alleged that one of the Directors resigned due to lack of action on suspicious audit findings. The organisational indifference is cowardly to say the least. So it is welcoming that MACC is looking at the British laws which make company’s employees’ corruption as a corporate crime. The move will promote corporate governance which in Malaysia is much talked about but the least monitored.

Those GLCs big guns are earning a lot of money and enjoying social status and so it is incumbent upon them to be both responsible and accountable for infractions in corporate governance.

A Monster Iceberg

I believe this corruption is only the tip of the iceberg in Malaysia. MACC has to work harder and focus on areas that matter especially to the economic well being of Malaysia rather than investigating alleged corruption involving some RM2k as in the tragic case of Teoh Beng Hock!

As the amount of the bribery is quite hefty, I am wondering whether there is someone more powerful especially politically, standing behind those corrupt officers. I am thinking aloud here.

Alcatel-Lucent corruption is not the first and certainly is not going to be the last as long as the authorities do not walk the talk.

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