Saudi Group Files Lawsuit Against Lucent, ACEC

RIYADH, 14 August 2003 — A Saudi telecommunications group last week filed a lawsuit accusing Lucent of bribing a Saudi official in order to gain business in the Kingdom. In the lawsuit filed in the New York District Court on Friday, the National Group for Communications and Computers alleges that Lucent and the Swiss company ACEC provided a former official with bribes worth an estimated $15 million between 1995 and 2002.

According to the reports released by news agencies today, the Saudi official received the money for influencing the government-controlled Saudi Telecom Company to select equipment supplied by Lucent and ACEC. Lucent, the world’s leading supplier of communication systems and technologies, with a workforce of 136,000 including 3,100 in Saudi Arabia, has denied the charges of bribery.

Lucent has a substantial presence in Saudi Arabia. Under the Telephone Expansion Program (TEP-6), Lucent Technologies awarded contracts worth over SR15 billion to Saudi suppliers and contractors. It also established a Lucent Technologies Training Center (LTTC) in Riyadh.

Referring to the charges, the Saudi company has alleged that it suffered damages worth $63 million when the accused Saudi official intervened to allow Lucent to back out of a contract with the Saudi firm.

National Group is seeking triple damages against Lucent under US racketeering laws. Lucent has pledged to defend itself and ACEC is reportedly being investigated by the Swiss government.

After a protracted restructuring, which saw the loss of tens of thousands of jobs during the telecoms slump, Lucent is beginning to show signs of a turnaround. It has an outstanding track record for innovation but a series of poor business decisions and a string of damaging incidents have wreaked havoc with the company and its finances.

Lucent also failed in its bid to overturn a UK ruling in favor of the Saudi Cable Company in 1999.

Lucent was again in the news recently when the FBI arrested three Chinese nationals — two Lucent Technologies scientists and an associate — on charges of forming a company called ComTriad Technologies through which they sold Lucent trade secrets to a Chinese company they had formed with a group known as DatangTelecom Technology.

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