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Microsoft pays $ 26 million to settle the Hungarian bribery program



Photo: Elaine Thompson (AP)

Microsoft pays $ 26 million to settle charges filed by its employees against government officials In Hungary told the Washington Post on Monday that Brad Smith, President and Chief Legal Officer, e-mailed employees about "employee misconduct that was totally unacceptable."

The agreement in which Microsoft did not acknowledge or deny misconduct According to a Wall Street Journal report from 2018, the US Department of Justice and the Securities and Exchange Commission investigated whether Microsoft sold discounted software to Hungarian middlemen from 2013 until 2015 at inflated prices sold to the government of the country. The middlemen fueled the system by giving some of their poorly earned bribes and bribes to government officials involved in the procurement process.

The SEC said in court documents that Microsoft did not have "adequate procedures" In a 2014 case, Microsoft Hungary employees received a 27.85 percent discount for selling software to the Hungarian national tax authorities. and Customs, the Securities and Exchange Commission, one of the US authorities with which Microsoft ruled, said in an injunction Monday. The reseller who transacted this account did not pass on the full rebate and used part of the difference to "finance inadmissible payments to government officials".

While the SEC found that Microsoft cooperated in the investigation, it said in a Monday order that the company did not have sufficient procedures to determine whether the rebate requests were legitimate and whether the approved rebates were being passed on to end users ,

According to the Post, the SEC said Microsoft has raised $ 13.78 million in program revenue, which it will repay to the SEC plus $ 2.78 million in interest. Microsoft Hungary entered into a separate non-tracking agreement with the DOJ, which provided for a disbursement of $ 8.75 million. Reuters wrote that the deal also resolved the SEC allegations of sloppy Microsoft accounting controls in Saudi Arabia and Thailand leading to "slush funds" as well as an "unexplained rebate on a transaction with the Turkish Microsoft entity".

"Although Microsoft Hungary did so Because Microsoft Hungary does not voluntarily disclose the misconduct, it received recognition for its and the significant collaboration Microsoft Corporation has with the Ministry's investigation and for taking comprehensive remedial action," wrote the DOJ in a press release.

In the e-mail to the employees wrote Smith In 2016, Microsoft dismissed four employees from his Hungarian unit and announced the business relationship with four resellers. Resellers, however, responded by complaining to local regulators to restore their business and some of the staff sued us. Smith added "He is grateful that the local courts and regulators have supported our decision to break all ties with individuals and companies that we believe are completely unethical," and wrote that he was pleased that the SEC and the DOJ recognized "the scope of our cooperation".

As the Post noted, the $ 25 million settlement is significantly smaller than in some other cases involving violations of the Foreign Corrupt Practices Act. Walmart approved an agreement in June 2019 of $ 282 million, which resulted in corruption at foreign subsidiaries in Mexico, Brazil and China. However, the SEC accused Walmart of turning a blind eye for years to accelerate its expansion abroad.

] [Washington Post]


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