Prosecutors in Germany confirmed on Wednesday that they have launched an investigation of executives at Deutsche Telekom (DT), including CEO Rene Obermann, to ascertain the legitimacy of dividends paid by a unit of Hungarian telecom operator Maygar Telekom to subsidiaries based in Montenegro and Macedonia. DT holds a 59.8% controlling stake in Maygar, which, in turn, owns 77% of Telekom Montenegro and 51% of Macedonia’s Makedonski Telekom (MT). The probe stems from DT’s 2006 disclosure to the U.S. Securities and Exchange Commission that the payment of dividends the previous year by Maygar to the aforementioned subsidiaries may have been improper. (At that time, Maygar’s stock was listed in the U.S.) Obermann, who became the CEO of DT in 2006, was the chief of international business at DT’s T-Mobile unit at the time the dividends were paid. Although Obermann has testified several times in the U.S. as a witness, prosecutors in Germany claim that Obermann approved the dividend payments to MT shareholders—including the Macedonian government—on the condition that the government shelved plans to open Macedonia’s telecom sector to competition. Affirming that his office was taking up the matter at the request of the U.S. Justice Department, Jan van Rossum, the assistant prosecutor in Bonn, Germany, maintained the purpose of the probe is “to determine if there is a basis for further investigation and charges.” Declaring that “the chief executive of [DT] rejects these allegations as false,” a spokesman for DT stressed that his company “has fully cooperated with the U.S. investigation.”
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German officials confirm probe of Deutsche Telekom executives
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