HP accused of bribes to secure deal in Russia

Hewlett-Packard, the world's largest computer manufacturer, faces allegations that it secretly paid millions of euros to secure a contract in Russia - from the organisation that investigates bribery and corruption.

German authorities are following an international money trail that has reportedly taken in the US, the UK, the British Virgin Islands and Belize, among other places, after turning up suspicious transfers through a small company in the German state of Saxony.

The investigation has centred on a €35 million ($66 million) contract to supply computer services and hardware to the office of the Russian prosecutor general. On Wednesday, Russian investigators raided HP's offices in Moscow, following a request from Germany.

German authorities say they have targeted nine suspects, including former staff at HP. The suspicion is that €8 million in kickback payments were made.

HP confirmed an investigation was under way, but would not discuss specific allegations. The multi-year contract with the prosecutor general's office was signed in 2003 with an HP subsidiary based in Germany, but it remains unclear to whom the alleged bribes were paid and over what period.

The unidentified suspects are under investigation for possible breach of trust, tax evasion and bribery of foreign officials, according to the Dresden prosecutors' office. The office is awaiting documents seized in the searches in Moscow.

The HP case is the latest corruption investigation involving multi-nationals in Germany. Daimler last month agreed to pay US$185 million to settle US charges that it bribed foreign officials.

- INDEPENDENT