Algerian ban on ZTE, Huawei highlights corruption controversy

12.06.2012
The conviction on corruption charges and a two-year ban imposed on ZTE and Huawei Technologies in Algeria underscores the growing controversy surrounding the awarding of ICT contracts to Chinese firms in northern and sub-Saharan Africa.

The two companies were found guilty by a judge last week of corruption charges related to tenders for state telecom contracts, specifically for bribing executives at the state-owned telecom network, Algérie Télécom, between 2003 and 2006. In addition to a two-year ban on participating in telecom bidding in the country, the two companies have been fined 3 million dinar (US$30,000) each.

Two executives of Algérie Télécom, Mohammed Boukhari and Chami Madjodoub, were found guilty of receiving the payments and money laundering and were sentenced to 18 years imprisonment and ordered to pay $64,000 each in addition to the prison terms.

Three Chinese officials, Dong Tao and Cheng Zhibo of ZTE and Xiao Chuhfa of Huawei, were sentenced in their absence to 10 years in jail. Their extradition is being sought by the Algerian government although it is unlikely that China will extradite them.

Statements from the companies confirmed the details of the sentences but denied the charges. Huawei in a statement presented the companies as "victims of bribery as well," pushing the blame on the executives cited for the offence.

But the convictions put pressure on the China-based companies to show they can participate in telecom and networking bids in the region without resorting to bribes, industry insiders say.