Hewlett-Packard ‘cooperating’ after Moscow raid

Bloomberg News

Hewlett-Packard Co., the world’s largest PC and printer maker, said it’s cooperating with Russian and German authorities after its Moscow offices were searched Wednesday in a possible bribery investigation.

German prosecutors are investigating possible corruption linked to its 35 million euro ($47.5 million) sale of computers to Russia about seven years ago. They are examining whether the company paid bribes to win the contract, said Wolfgang Klein, a spokesman at Saxony’s Chief Prosecutor’s Office.

A special unit is probing nine people for breach of trust. The suspects may have set up a system of sham companies and contracts, leading to 8 million euros ($10.8 million) in improper payments, he said.

“It is unclear where these 8 million euros went,” Klein said. “I don’t want to use the word bribes to say what they were used for, but we’re looking into that.”

Hewlett-Packard, based in Palo Alto, Calif., said it’s conducting its own internal investigation into the case. On blogs yesterday, the company’s employees in Russia said the raids started at around 9:40 a.m. local time and that staffers were asked to leave their desks and wait at the reception.

“This is an investigation of alleged conduct that occurred almost seven years ago, largely by employees no longer with HP,” said Gina Tyler, a spokeswoman for Hewlett-Packard. “We are cooperating fully with the German and Russian authorities and will continue to conduct our own internal investigation.”

Carly Fiorina was Hewlett-Packard’s chief executive officer during the period. Her spokeswoman Thursday denied she had any knowledge of the alleged actions.

The probe was started last year after German tax authorities routinely reviewed the books of a small company in the East German state of Saxony, said Klein. The tax investigators found that no real use could be established for some payments found in the accounts, he said.

Russian prosecutors have raided several foreign companies based in Moscow, including Strabag SE, Hermitage Capital Management Ltd. and Siemens.

In February, Ikea, the world’s biggest home-furnishing retailer, said it fired two foreign executives in Russia for violating company policy by approving a bribe to ensure power supplies to its Mega Mall in St. Petersburg.