Call For Mitsui Blacklist If Telekom Malaysia Kickbacks Proven

By Lesley Moore, Newsbytes.

18 Feb 2000, 1:34 AM CST

Call For Mitsui Blacklist If Telekom Malaysia Kickbacks Proven 02/18/00 KUALA LUMPUR, MALAYSIA, 2000 FEB 18 (NB) -- By Lesley Moore, Newsbytes. Transparency International, an independent international anti-corruption body, has called for the blacklisting of Japanese trading house Mitsui & Co from all future contracts in Malaysia, if allegations of bribes to a company acting for Asian telecom carrier Telekom Malaysia are found to be true.

"If complicity is proven, blacklisting and barring Mitsui will send a clear signal to all international bidders that Malaysia is totally against bribery," said Tunku Abdul Aziz, vice chairman of the Berlin-based non-profit, non-political watchdog in a statement.

He was commenting on an Asahi Shimbun report last Friday that Mitsui had paid a company representing Telekom Malaysia about 300 million yen (US$2.70 million) in kickbacks as an inducement to win an estimated 10 billion yen ($90.15 million) switchboard contract.

The Japanese newspaper, quoting sources at the Tokyo Regional Taxation Bureau, said Mitsui beat European rivals to win the deal in a syndicate with Japan's NEC Corp in late 1996 after it paid "commissions" to a dummy company.

Mitsui reportedly also paid a total of 100 million yen ($901,469) in similarly questionable payments to South Korea, Morocco, Jordan and Qatar in the name of "agent fees" and other items.

Mitsui has reportedly denied the allegation while Telekom Malaysia claimed no wrong-doing Monday, but has ordered its own full investigation. The matter is also under investigation by the Malaysian authorities via its Anti-Corruption Agency as of Tuesday.

Aziz, who also heads the Malaysian chapter of Transparency International, urged the Malaysian government to apply the full weight of the law against the guilty parties.

"In this case obviously we need to look at both the giver and the taker because it takes two to tango," he said. "For Telekom Malaysia and other state-controlled enterprises there is an urgent need to put into place clear and transparent procedures for procurement."

He added that Malaysia should subscribe to the proposed World Trade Organization Transparency Agreement to "close another window of opportunity for grand corruption, improve investor perceptions and provide for better returns in public sector spending."

Dominant fixed-line telco player Telekom Malaysia is still state-controlled and is one of the most heavily capitalized firms on the Kuala Lumpur Stock Exchange. It also has a large mobile and Internet services subscriber base and various investments in developing countries.

Mitsui is one of Japan's largest sogo shosha, or general trading companies.

Transparency International can be found on the Web, at , while Telekom Malaysia is at , and Mitsui & Co is at .

Exchange Rate: $1 = 110.83 yen

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01:34 CST


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