Microsoft fires employees found involved in Hungarian Government bribes

Microsoft is currently being probed for bribery over deals in Hungary. (Source: Value Investor)
Microsoft is currently being probed for bribery over deals in Hungary. (Source: Value Investor)
Microsoft has confirmed that it has fired four employees and terminated business relationships with four partners in Hungary over ongoing probings for bribery and corruption. The investigation is on for sale of Microsoft software to middlemen for a discounted price who then resold the same to the Hungarian Government at full price.

Microsoft has fired four of its employees and four business partners at its Hungarian office amidst allegation of bribery and corruption. This was confirmed by the company after a Wall Street Journal report that the US Department of Justice and the Securities and Exchange Commission (SEC) are a probing potential scheme of bribery and corruption in selling software to the Hungarian Government.

The case goes back to 2014 after it came to light that Microsoft sold some of its products to intermediary business partners at highly discounted prices who in-turn sold these products to the Hungarian Government at closer to full price. Under the US Foreign Corrupt Practices Act, officials are investigating whether the intermediaries used the difference amount to provide kickbacks and bribes to the Hungarian Government officials. Microsoft itself is not charged with any wrongdoing but the company quickly started internal investigations to probe the matter. Since then, Microsoft said it had put in efforts to increase transparency when it comes to discounting and working with business partners. Microsoft Hungary country manager, Istvan Papp, is among the four who were fired.

The discounted deals, however, did help Microsoft bolster its image locally and increase revenue for its Hungarian operations. Microsoft said that it is fully cooperating with the Department of Justice and SEC re-affirmed its commitment to ethical business practices. That said, in its SEC filing earlier this month, Microsoft did admit that it was battling corruption issues in various countries including the Czech Republic and Romania.


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Vaidyanathan Subramaniam, 2018-08-24 (Update: 2018-08-24)
Vaidyanathan Subramaniam
I am a cell and molecular biologist and computers have been an integral part of my life ever since I laid my hands on my first PC which was based on an Intel Celeron 266 MHz processor, 16 MB RAM and a modest 2 GB hard disk. Since then, I’ve seen my passion for technology evolve with the times. From traditional floppy based storage and running DOS commands for every other task, to the connected cloud and shared social experiences we take for granted today, I consider myself fortunate to have witnessed a sea change in the technology landscape. I honestly feel that the best is yet to come, when things like AI and cloud computing mature further. When I am not out finding the next big cure for cancer, I read and write about a lot of technology related stuff or go about ripping and re-assembling PCs and laptops.