Hewlett-Packard bribery probe deepens

A US probe into whether IT giant Hewlett-Packard paid bribes to win contracts in Russia has expanded into several other European countries.

The US Justice Department and Securities and Exchange Commission are examining the possibility HP also paid kickbacks to potential customers and distributors in Austria, the Netherlands, Serbia, as well as former Soviet states.

Investigations have been ongoing since 2009, when German authorities announced they were scrutinising HP’s dealings with Russia’s prosecution office. They alleged that employees at the Palo Alto company paid bribes to win a $46 million contract in the country, which ran from 2001 to 2006.

The SEC and Justice Department joined the probe in September 2010, and are currently looking into whether HP has acted in breach of the US Foreign Corrupt Practices Act in its European dealings since 2000. "HP is fully cooperating with the investigating authorities," an HP spokesperson said.

It has been a mixed a year for HP. In August, CEO Mark Hurd left the company following an internal investigation into sexual harassment allegations. These proved untrue but Hurd was found to have filed "questionable" expense claims. Hurd has since joined rival Oracle, while HP appointed Leo Apotheker, who himself was dismissed from his role as SAP CEO this year.

HP’s latest financial results showed the company was growing following the downturn, albeit at a modest rate. Overall sales were up 8% to $33.3 billion, but its IT services business appeared to have stalled.

There are positive signs in this regard, though. In December 2010, HP signed a $1.4 billion infrastructure outsourcing deal with utility provider E.ON.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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