IBM Korea dismisses executive in bribery probe

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IBM Korea dismisses executive in bribery probe

IBM's Korean subsidiary has dismissed several employees following their indictment by public prosecutors investigating the use of bribery to secure government contracts.

Chang Kyung Ho, the executive in charge of IBM Korea's public sector business, Lee Jeong Woo, public sector territory manager, and Yong Ki, public sector cluster manager, were dismissed for violating IBM's code of conduct and business behaviour, said Craig Lowder, IBM's vice-president of communications for Asia-Pacific.

The dismissals come after a two-month investigation by the Seoul District Prosecutor's Office into IBM and two affiliates: its LGIBM PC joint venture and Winsol.

The investigation, which also resulted in the indictment of several dozen other people at several companies, focused on a number of public sector computer contracts put out for tender between 2001 and 2003.

Prosecutors alleged that the company created a slush fund from which to pay officials in order to receive contracts from government agencies. The size of the slush fund was $2.5m and the total value of contracts received was $55m.

Government agencies involved include the National Tax Office, Supreme Prosecutor's Office, Ministry of Information and Communication, the Army, the Navy, Korea Electric Power, Korean Broadcasting System, Korea Telecom and the Association of the Korean Federation of Community Credit Co-operatives.

"The allegations contained in the indictments raise serious concerns for IBM Korea," the company said.

"We regret the actions by several individuals named in the indictments, who violated IBM's strict code of business conduct and highest business standards. Their actions were neither approved or condoned by IBM Korea. IBM has taken action against them including termination of employment."

Martyn Williams writes for IDG News Service


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