involving the signing of massive contracts with no justifiable purpose,
announced a new policy of openness at a breakfast meeting with
journalists last Tuesday. CEO Christopher Mattheisen also spoke of
major plans to restructure the company, while trying to dampen
speculation about mass redundancies.
the different strands of its operations in order to achieve savings of
unspecified “billions” of forints.
divisions, T-Com and T-Mobile, into one magenta-coloured telco giant
will be put before shareholders at a meeting at the end of the month.
The Magyar Telekom group currently comprises some fifty companies.
Mattheisen acknowledged that there will be redundancies, but, he said,
“far fewer than there would be if it were not for the company’s policy
of streamlining, consolidation and restructuring”. No concrete figures
eastern Europe, is still on the agenda at Magyar Telekom, although
Mattheisen recognised that there are not many big opportunities at
after months of wrangling following revelations by the Hungarian press
of corrupt business practices at its Montenegrin subsidiary Telekom
Montenegro. His first task was to re-establish confidence and polish
Magyar Telekom’s tarnished image. Laying to rest the ghosts of a major
corruption scandal is a burden he will have to bear for some time yet.
expressed concerns over a consultancy contract worth HUF 700 million
(EUR 2.76 million). Subsequently, a further three dubious contracts
came to light: another from Telekom Montenegro and two involving Magyar
Telekom directly, though related to its Montenegrin unit.
investigations by the Hungarian press suggested that money – ostensibly
for market research projects – was channelled into offshore companies.
The ensuing scandal led to the resignation of CEO Straub in December
last year. To date, investigations into the Montenegrin unit have cost
Magyar Telekom HUF 4.1 billion (EUR 16 million), and Mattheisen said he
expects a roughly equivalent sum to be spent on concluding the
investigation and implementing the company’s response to the final
entered into contracts the purpose of which we cannot now explain.” At
the beginning of this year, the investigation into the activities of
the whole Magyar Telekom group also turned the spotlight on the
company’s activities in nearby Macedonia. The investigation – looking
at contracts and internal procedures and controls – is now in its final
phases, said Mattheisen. Although he said that contracts that warrant
closer inspection had come to light in Macedonia, he declared that no
Montenegro-style wrongdoing had been uncovered so far.
honesty of Magyar Telekom in atoning for its recent crimes could set an
example to other companies in the region. With increasing public
concern over corporate social responsibility, he declared that the new
strategy could even give the company a competitive advantage over its