Magyar Telekom’s audit committee has wound up its four-year internal investigation into contracts signed by the company’s Montenegrin and Macedonian units in the middle of the decade.
The company hired White & Case as independent legal counsel to carry out the internal investigation. Magyar Telekom has now spent around Ft 20 billion on the probe to investigate the improper dealings of the two subsidiaries, which are estimated at €31 million.
There was evidence that around €7 million of the expenditure on four consultancy contracts signed by the Montenegrin unit “served improper purposes”. These contracts were not properly recorded in the books and records of Magyar Telekom, nor of the relevant units.
From 2000-06 former senior executives at the Macedonian affiliates authorized some €24 million expenditure on more than 20 suspicious consultancy, lobbying and other contracts.
The investigation found no evidence of the legitimacy of these contracts.
Am I mathematically challenged, or is this saying that Magyar Telekom spent 75M EURs to investigate 24M in expenditure, of which 7 was fraudulent?
At 1.8M customers (or lines) in the 2 countries serviced (Montenegro and Macedonia) according to the annual report, its only a surcharge of 13 EUR to catch a fraud of 4… Another wonderful deal brought to you from you local monopoly.
I am mathematically challenged! 75 for the investigation +7 in fraud, or 82/1.8 subscribers (Matav investor report) is 45 EUR per head. With an average monthly income between the 2 of approximately 400 EUR (http://www.globalpropertyguide.com/Europe/Montenegro/gdp-per-capita) I guess if that’s tacked on to one monthly bill, it should only cause about 1.8M heart attacks.
@Rolrox:
With these monopolistic (or rather oligopolistic) companies – what’s a few zeroes here or there…
Journalists often do not really understand the numbers thrown at them. Maybe we’ll get more information later.
BTW: Isn’t Magyar Telecom a subsidiary of German Telecom – hey that affects my dividend!