ANSWERED on Tue 17 Nov 2009 - 11:19 pm UTC by davidsarokin
Question: IBM - 2006 Bribery Scandal in China
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Asked by amit.k on Tue 17 Nov 2009 - 12:22 am UTC:
I am looking for any articles, journals, editorials, etc. regarding the IBM bribery scandal in China in 2006. This is the scandal I am referring to: http://www.nytimes.com/2006/11/30/business/worldbusiness/30iht-bank.3731302.html For some reason, there are many articles like the NY Times one out there that are similar, but none that really go into detail about what happened, and perhaps its implications for multinationals in China. Let me know if you need further clarification. Thank you once again!
Request for clarification by Researcher davidsarokin on Tue 17 Nov 2009 - 3:46 pm UTC:
amit.k, I did search for this the other day, and found surprisingly little. There are a few academic papers that discuss the scandal, but the discussion is brief, and I did not see anything that went beyond the information presented in the IHT article. If anything more turns up, I'll certainly let you know. David
Comment by amit.k on Tue 17 Nov 2009 - 3:47 pm UTC:
I guess they have good PR people! Please do keep me posted. Thanks David.
Comment by amit.k on Tue 17 Nov 2009 - 8:46 pm UTC:
Hey David, I guess I'm just outta luck with this question. If you could post what you found as the answer plus any other tips you might have for me to potentially find out more about this, that would be great. Wouldn't want your efforts to be in vain. Thanks again.
Answer by Researcher davidsarokin on Tue 17 Nov 2009 - 11:19 pm UTC:
amit.k, Here are some newspaper articles and a few academic papers that discuss the IBM/China Construction bribery case. There are a smattering of additional details available, beyond what was presented in the article you cited in your initial question. I hope the materials are useful for your research. Let me know if there's anything more I can do on this. To tell the truth, though, to dig much deeper, I suspect you'd have to try to uncover the actual court documents, which is a real challenge in non-US jurisdictions. All the best. David ==================================== http://www.nytimes.com/2006/11/29/business/worldbusiness/29corrupt.html?pagewanted=print November 29, 2006 Charges of Bribery in a Chinese Bank Deal "...Three weeks ago, a Beijing court sentenced Zhang Enzhao, the 60-year-old former chairman of China Construction Bank, to 15 years in prison for accepting more than $500,000 in gifts and bribes, including gifts that came from a consultant who worked for Fidelity, as well as I.B.M., according to Bloomberg News and Cai Jing, a Chinese business magazine. None of the American companies have been charged with any crimes. http://www.nytimes.com/2007/01/20/business/worldbusiness/20bribes.html Western Companies Caught Up in Chinese Bribery Inquiry January 20, 2007 http://www.chinacsr.com/en/2006/11/09/841-ibm-suspected-of-bribing-chinese-bank-official/ IBM Suspected Of Bribing Chinese Bank Official "...Local media report that a Beijing court has mentioned in its judgment against Zhang Enzhao, former president of China Construction Bank, that IBM had assisted a sales agent named Zou Jianhua in bribing Zhang by paying him US$225,000. http://english.cri.cn/3126/2006/11/24/264@167029.htm Commercial Bribery--Foreign Companies Adapt to Local Market in Wrong Way 2006-11-24 http://english.people.com.cn/90001/90778/90857/90860/6720259.html Major commercial bribery cases of multinationals in China August 06, 2009 "...The IBM case: In November 2006, the Beijing First Intermediate People's Court announced that from 2002 through 2003, IBM's senior officers met with Zhang Enzhao, former chairman of the China Construction Bank, several times through the arrangement of a middleman. This contravenes China's principles and procedures for financial activities involving foreign affairs. As repayment, IBM deposited 225,000 USD of "service fees" into the HSBC Hong Kong account of the middleman who in turn transferred the money to Zhang. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1415902 Soft Seat on the Long March: Foreign Business and the Rule of Law in China http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1375003_code737772.pdf?abstractid=1319814&mirid=5 The Foreign Corrupt Practices Act, SEC Disgorgement of Profits, and the Evolving International Bribery Regime: Weighing Proportionality, Retribution, and Deterrence
Comment by User frde on Thu 19 Nov 2009 - 9:47 am UTC:
In 1976 I worked as an 'intern' for a fairly well known company in Germany. They had recently sacked their finance director for taking bribes from ... a large computer company. About 1981 I was working for a computing intensive company in the leisure sector - a subsidiary of an international conglomerate. A certain large computer company played (what I was told was) its usual trick of dealing with an uncooperative CEO. They went above his head to the conglomerate. They misjudged things and our mainframes were pulled out and replaced with DEC minis. Leopards and spots.
Comment by User myoarin on Thu 19 Nov 2009 - 12:16 pm UTC:
And Siemens in Germany is still in the throes of a big bribery case. Not too many years ago, bribery (in foreign countries ) was legal in Germany, an accepted business expense for taxes. No one really believes the practice stopped when it became illegal or that management to the top didn't know about it. The messy part has been that the company has had to sue the individuals caught to demonstrate they were acting outside company policy, although anyone can assume that the millions didn't get into slush fund accounts without "higher approval". This all has nothing - much - to do with the other question about the cost of generating leads. Tigers and stripes
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Comment by amit.k on Tue 17 Nov 2009 - 3:29 pm UTC: