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Deutsche Telekom Corruption in Slovakia?

Deutsche Telekom signed the United Nations Global Compact as a founding member and as one of the first ICT companies. We acknowledged […] and made a commitment to respect human rights, maintain appropriate working standards and take an active role in environmental protection and fighting corruption.

From Deutsche Telekom: Showing Initiative (Voluntary Commitments)

Deutsche Telekom logo - Slovak Telekom logoImagine you are a citizen living under modern liberal democracy of western type. Imagine there are two days to national election. Imagine that a de facto telecommunication monopoly closes a deal with the governmental authorities to supply an internet connection to all public schools in the country for 38 millions Euros. Moreover, price for the internet connection is up to twice as high as in the former deal, despite the fact that internet connection costs have plummeted over the last few years. This has to be a joke, right?

Wrong. Slovak Telekom (T-Com), a subsidiary of Deutsche Telekom, have done just right that. Two days before election took place, Slovak Telekom (owned by Deutsche Telekom) signed the deal with the Ministry of Education of the Slovak Republic. What does that say about the corporate culture and corporate responsibility of Deutsche Telekom? What does that say about the managers at Slovak Telekom? Is that how Deutsche Telekom does business in Germany and trains Slovak Telekom’s managers to follow their lead?

Employees of the Deutsche Telekom Group must refrain from any kind of corrupt behavior. In particular, they are forbidden to illegally influence decision makers in companies, authorities or public institutions by offering, promising or granting advantages. Equally, they are forbidden to demand or accept such advantages from third parties, or to have a third party promise such advantages in the course of business.

From Slovak Telekom: Our Code of Conduct (PDF)

Deutsche Telekom Investor Relations

I am sure that Deutsche Telekom values their investor relations. I am sure Deutsche Telekom is a responsible company doing transparent business, opposite to the recent corruption scandal at another German company – Siemens, where the Siemens concern was fined by the US authorities $800 millions. Siemens also agreed to pay fines of 395 millions Euros to settle the case in Germany. I am confident that any sane investor will evaluate how Deutsche Telekom is conducting business in the post-communist countries such as Slovakia, where its subsidiary Slovak Telekom closes highly dubious (and overpriced) deal two days before national election. This non-transparent decision of Slovak Telekom’s management could affect Deutsche Telekom investor relations.

Will Deutsche Telekom take a firm step and agree to cancel the fishy deal and submit a new contract in the new transparent tender? Or will Deutsche Telekom hurt their investor relations by not taking any steps to clear up the doubts regarding possible corruption? I am not sure. What I am sure of, though, is the fact that some people will stumble upon this Deutsche Telekom Corruption in Slovakia? blog post and think twice how the company does their business.

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