Batelco denies corruption as probe looms

Telecom to investigate allegations it paid off Jordan exec to secure acquisition.

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By  Mohammed Abbas Published  January 9, 2008

Bahrain is considering whether to investigate allegations of graft at Bahrain Telecommunications and officials discussed the charges with the company on Wednesday, one of the officials told newswire Reuters.

After the meeting, the company, known as Batelco, denied the allegations made by a lawmaker and carried by Bahrain's Gulf Daily News newspaper in its Wednesday edition.

The lawmaker, Abdullatif Al-Shaikh, accused Batelco of paying off an executive in Jordan to secure an acquisition in that country and of running bogus projects that allowed company officials to make money, the Gulf Daily News newspaper said.

Finance Minister Sheikh Ahmed bin Mohammad Al-Khalifa has asked Mahmood Al-Kooheji, deputy chief executive of state holding company Mumtalakat, and other state officials to look into whether an investigation was needed, Kooheji told Reuters.

Mumtalakat and other government entities own about 75% of Batelco's stock.

"There were allegations by a member of parliament. The minister of finance instructed me to meet with the MP and today we are listening to Batelco's board to hear both sides," Kooheji said.

"From there we determine if there is a need for any issues to be investigated," he said. Kooheji declined to elaborate on the allegations against Batelco.

Batelco said it had answered questions about the charges in detail and would give Mumtalakat more information next week.

"Each and every allegation will be investigated by Batelco's board," the company said in a statement.

"It is unfortunate that a number of unsubstantiated allegations have been made under parliamentary privilege, aimed to discredit one of the most successful companies in Bahrain," Chief Executive Officer Peter Kaliaropoulos said in the statement.

"Such allegations...are untrue and sensational," he added.

Al-Shaikh, a lawmaker of the Al Menbar political group, accused Batelco of paying 11.34 million dinars ($30 million) over six months to an executive at Jordanian mobile operator Umniah to secure Batelco's acquisition of the company in 2006, according to the Gulf Daily News.

Shaikh's Al Menbar group usually supports the government.

"Can anyone believe, someone who earns 5,347 dinars a month, should get 11.34 million dinars just to keep him for six months?" the paper quoted Al-Shaikh as saying.

Al-Shaikh also said Batelco executives were getting rich through fake projects, the paper reported.

"A bogus scheme of 1.5 million dinars to improve the structure of Batelco's services has never been checked by the company's projects committee, not assessed by the purchase department, not presented to the board, which approved it although the name of the supplier was fake," it quoted Al-Shaikh as saying.

Al-Kooheji declined to comment on when a decision whether to investigate the allegations would be made, or what action could be taken against any offenders. He could not be reached for comment after the meeting with the board.

Batelco's foreign operations including Umniah were the biggest drivers of profit growth last year.

In October the company said it planned to spend at least $4 billion on foreign acquisitions to offset an expected fall in profitability in its home market as competition intensifies. (Reuters)

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