IBM execs, S.Korean officials charged over bribery
( 2004-01-05 09:21) (Agencies)
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| Investigators have searched IBM Korea's three Seoul offices. [AFP] |
Some 48 South Korean government officials and corporate executives, mainly from IBM ventures, were charged with bribery in a case involving state contracts of computer parts and servers, prosecutors said on Monday.
The indictments followed an investigation into allegations that executives at IBM Korea, a wholly owned unit of U.S. computer firm International Business Machines Corp, and LGIBMPC Corp, a joint venture with Korea's LG Electronics Inc, had bribed government officials to bag the deals.
The Seoul District Prosecutor's Office said in a faxed statement that IBM Korea had won orders for servers and PC parts worth 51 billion won ($42.68 million) and LGIBMPC Corp had won orders worth 870 million won through the illegal collusive action.
"IBM Korea and LGIBMPC Corp had bribed computer-related department officials at state-run corporations and colluded with them in auctions to supply servers and PC parts," the statement said.
IBM Korea issued a statement saying that the action of some employees violated the firm's strict code of business conduct.
"Such activity was neither approved nor condoned by IBM Korea," the company said. "IBM Korea has taken action against these individuals, including termination of employment."
According to the statement from prosecutors, officials at the National Tax Office and the Information Ministry gave high marks for technology valuations at these companies when bidding for government contracts in return for bribes.
Executives at LG Electronics and SK C&C, an unlisted system network firm in the SK Group, and other subsidiaries of South Korean conglomerates were also involved in the collusive activities, it added.
The government would prevent these companies from participating in any state auction for servers and PC purchases for two years, the office said.
President Roh Moo-hyun has pledged to clamp down on corruption and shady business practices, with prosecutors spearheading a series of probes to cut collusive ties between politicians, bureaucrats and businessmen.
IBM Korea began operating in 1967 and is one of the oldest foreign companies in South Korea.
The company leads South Korea's server market with a share of 39.4 per cent, while LGIBMPC ranks fourth in Korea's PC and notebook market with a 10 per cent share. ($1=1,195.0 won)
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