High Standards at Deutsche Telekom?

On paper, Deutsche Telekom has a very progressive policy on corporate social responsibility. It promises to adhere to the highest norms of international labor standards, corporate governance, and environmental stewardship. According to its web site, 

Deutsche Telekom is keen on assuming a leading role in the world in the area of
corporate Responsibility (CR), by setting binding targets and priorities for the
company’s social responsibility.

According to the 2010 CSR report  of the company, “We take responsibility.”

Deutsche Telekom has a funny way of “taking responsibility.”

Readers of this web site have seen recently that the labor part of DT sustainability is mocked on a daily basis by the active union intolerance of T-Mobile USA, its wholly owned subsidiary.

DT sustainability also appears to be toothless in terms of corporate governance.

The Real T-Mobile came upon an interesting blog entry from The Economist, pointing to apparent instances of corruption at Magyar Telecom, 60% owned by Deutsche Telekom and controlled by DT. The independent auditor revealed some pretty dicey contracts between managers and vendors whose purposes were “not readily apparent.”

Apparently, the hanky-panky took place in MT’s subsidiaries in Macedonia and Montenegro. There were contracts worth € 7 million in Montenegro that might have served “improper purposes.” In Macedonia, there were contracts worth € 24 million to a Cyprus-based consulting company for the receipt of certain regulatory benefits.

Bribery? Looks that way, but there is no proof yet. But there are ongoing investigations, including at the U.S. Department of Justice. 

Sometimes it pays to read the fine print of dry financial statements. This news is certainly not revealed by Deutsche Telekom! So much for corporate social responsibility at DT!

The Real T-Mobile reported earlier that both DT and MT have de-listed from the New York Stock Exchange. Is there a connection to the rot within DT and its subsidiary?

Image from Deutsche Telekom's 2010 Corporate Responsibility Report