Ericsson, Huawei said to Bribe China Mobile Official

(Caixin) On the opening day of a trial surrounding a corruption probe over China Mobile, the country’s largest telecom carrier, procurators say that major telecom equipment makers Ericsson and Huawei Technologies were directly involved in bribing procurement officials.

The trial of Shen Changfu (沈长富), former chairman and president of China Mobile Chongqing Branch, began in the southwestern municipality of Chongqing on October 10. Sixty-year-old Shen was accused of accepting bribes totaling 36.2 million yuan, from companies including Ericsson and Huawei.

In 1996, Shen, who then served as the director of Chongqing Telecom Bureau, arranged for Ericsson’s facilities to be purchased by the bureau. In exchange, Shen obtained a 2 percent commission for the deal, according to procurators.

Procurators argued Shen abused his position at the state-owned China Mobile to benefit privately-owned Huawei, which took a major portion of telecom equipment orders from China Mobile Chongqing Branch.

In court, Shen said China Mobile’s standard procurement process is conducted through the pre-selection of designated telecom equipment makers which then participate in bidding, rather than via an open bid invitation procedure.

Shen’s son joined Huawei in 2003 and left two months later. According to procurators, he continued to receive a salary and bonus from Huawei for several years after his departure.

The court has yet to issue a ruling.

Over the past year, a number of senior executives at China Mobile have been detained in connection to corruption scandals. A wider anti-corruption campaign was launched by the government targeting the state telecoms trio of China Mobile, China Unicom and China Telecom, according to an earlier report by Caixin.

Shi Wanzhong, who used to head China Mobile’s branch in Anhui Province, was sentenced to death with two-year reprieve by a court in May for taking US$ 5.1 million in bribes from German manufacturer Siemens. In China, a death penalty with a reprieve typically means the inmate will not be executed.

Caixin staff reporter Deng Hai