Deutsche Telekom has confirmed CEO René Obermann’s home was one of eight searched by German authorities probing bribery at the telco’s Hungarian subsidiary.
Bonn prosecutors searched Obermann’s home late August, alleging he approved a dividend payment to Macedonian carrier Makedonski Telekom (MakTel) in return for closing the door of the market to competitors in 2005, the telco states.
Prosecutors believe the dividend payment forms part of a broader bribery scandal involving third parties, Deutsche Telekom explained.
“The CEO has rejected the allegations made against him as false,” the firm stated adding. “Deutsche Telekom does not tolerate corruption in any area of the Group worldwide.”
Deutsche Tel said it wasn’t aware of any link between the German investigation and a continuing probe by the US Securities and Exchange Commission, after Bloomberg said the US authority had requested the aid of local investigators but said it has co-operated fully with the SEC’s probe for over four years “with the CEO himself testifying as a witness.”
The firm also noted that “no allegations have been made against the CEO personally at any stage of the US investigation.”
Indeed, the SEC probe was sparked by Deutsche Telekom in 2006, when an internal audit found Hungarian subsidiary Magyar Telecom had awarded contracts worth €24 million for which no legitimate purpose could be found.
The investigation centers on whether those contracts were used by Deutsche Telekom’s subsidiaries in Montenegro and Macedonia, Bloomberg reported.
Deutsche Telekom owns 76.53% of Telekom Montenegro through its Magyar holding and 51% of MakTel.