Balz: "The allegations cannot be explained"

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The Bonn public prosecutor's office has initiated an investigation of eight persons, among them René Obermann, in connection with suspected acts of bribery in Macedonia and Montenegro. The CEO has rejected the criminal allegations made against him as false.

Manfred Balz, Board Member responsible for Data Privacy, Legal Affairs and Compliance, outlines the background and clarifies the situation.

Mr. Balz, is Deutsche Telekom heading for another scandal?

Manfred Balz: These incidents have been reported on and dealt with for a number of years in various committees and reports at both Magyar Telekom and Deutsche Telekom. Neither the Group's Board of Management nor its Supervisory Board are able to explain the allegations being made against René Obermann. We are confident that the Bonn public prosecutor's office will come to the same realization in its investigations. The press has brought in the big guns with reports of raids and bribes worth millions of euros…

Manfred Balz: The investigation centers on allegations of bribery in Macedonia and Montenegro between 2000 and 2007. In their final audit, external auditors and attorneys commissioned by Magyar Telekom uncovered suspicious contracts at a Montenegrin subsidiary of Magyar Telekom in January 2006. Magyar Telekom then launched an internal investigation into the incidents, examining around 30 contracts worth approximately 30 million euros in total. The independent law firm commissioned to carry out the investigation identified a number of shortcomings in the contracts. In addition, bribes were allegedly paid to government officials and politicians in Macedonia and Montenegro. What is René Obermann actually being accused of in this whole affair?

Manfred Balz: We are still unclear about the specific allegations being made against our CEO. The search warrant refers to a conversation between him and the CEO of Makedonski Telekom (MakTel) in 2005 in which René Obermann is accused of approving dividend payments at MakTel on the condition that the telecommunications market in Macedonia not be opened up to other competitors as planned. The Bonn public prosecutor's office is linking this to alleged bribery payments made by third parties. The reports in the media are contradictory: Is the CEO a witness or a suspect?

Manfred Balz: The CEO is also under investigation by the Bonn public prosecutor's office. The US Securities and Exchange Commission and the US Department of Justice have been investigating the matter in the United States for over four years now. The CEO has, however, never been a target of the US authorities' investigation. He has already assisted the authorities as a witness in a video conference that lasted several hours. In the course of these proceedings, the US authorities requested legal assistance from the Bonn public prosecutor's office, which prompted the prosecutor to launch an investigation into René Obermann and several others. We have no idea why the Bonn public prosecutor's office is investigating René Obermann or why they searched his home. Surely the fact that the investigation is now also being conducted in Bonn means that new findings must have come to light?

Manfred Balz: We are not aware of any new findings beyond those identified in the comprehensive investigations carried out over several years by the independent law firm and state authorities, in particular in the United States and Hungary. We have been collaborating with the US investigators for five years now and have received no information about their request for legal assistance.