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Microsoft accused of spending millions in bribes to close deals

A former Microsoft CEO Yasser Elabdha accused Microsoft of paying millions of dollars in bribes to close business deals in Africa and the Middle East. Elabd has assured that in 2016 he questioned a payment of 40,000 dollars to make a sale in an African country, for which he later suffered reprisals and was fired in 2018. In 2020, Elabd assured that he received more information about the event when a former colleague from Saudi Arabia began to forward emails and documentation that had evidence of corrupt practices.

Thus, Elabd points out that «examining a multi-partner audit conducted by PricewaterhouseCoopers“, he discovered that “when the terms of a product sale, or a contract, were agreed upon, a Microsoft sales officer or employee would then propose a side agreement with the partner and the buying entity’s decision maker. The decision maker would then send an email to Microsoft asking for a discount, which was granted, but the end customer still paid full price. The discounted amount was then distributed among the colluding parties: the Microsoft employee involved, the partner, and the purchasing entity’s decision maker, who was often a government official.«.

It is not the first time that Microsoft has faced this type of accusation, which has caused it to be sanctioned in the past. In 2019, Microsoft was fined by the United States Department of Justiceas well as by the Property and Securities Commission, for this same behavior in several countries. The Redmonds agreed to pay $8.7 million in criminal penalties for alleged bribery in their business practices in Hungary.

In addition, following an investigation related to that case, that same year Microsoft agreed to pay the SEC $24 million under a settlement to drop charges that it had violated the Foreign Corrupt Practices Act (FCPA). , which prohibits the payment of bribes to government officials to help them close deals, through subsidiaries in Hungary, Thailand, Saudi Arabia or Turkey, as well as criminal charges for their conduct in Hungary.

As the SEC described the situation at the time, Microsoft offered discounts on software licenses to its partners, who instead of offering them to Microsoft’s government customers used them to fund payments to government officials for approval of software. sales agreements. In addition, he claimed that Microsoft affiliates improperly offered gifts and travel to foreign government officials, as well as non-government customers, through a fund for illegal purposes offered by Microsoft partners and resellers.

As for Elabd, he claims to be aware of five other Microsoft employees who were either fired or forced to resign for reporting financial irregularities. In addition, he assures that the SEC has refused to open an investigation into it, despite the fact that he has presented evidence to them as part of his complaint.

They thanked him, but did not admit in case, «claiming that the pandemic has prevented them from gathering more evidence from abroad, even though I have already provided them with documentation that I believe shows that Microsoft is in violation of the 2019 agreement, and that it is still involved in corrupt businesses that violate US law«.

On the other hand, the former director of the company alleges that the company knows what is happening with its partners and deliberately turns a blind eye, pointing out that, according to his estimates «a minimum of 200 million go to Microsoft employees, partners and government officials each year«, and that according to his experience, «between 60% and 70% of sales staff and managers in the Middle East, Africa and parts of Europe are receiving these payments«.

According to The Register, Microsoft responded to Elabd’s accusations with a statement of Becky Lenaburg, Vice President and Vice General Counsel, Ethics and Compliance, Microsoftin which he pointed out that the company is «We are committed to doing business responsibly and always encourage anyone to report anything they see that may violate the law, our policies or our ethical standards. We believe we have investigated these allegations before, which are several years old, and have addressed them. We cooperate with government agencies to resolve any concerns«.

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