Microsoft fires employees found involved in Hungarian Government bribes
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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