Huawei Said to Have Uncovered Corruption in Internal Probe: Report

Huawei Technologies Co Ltd, China's largest telecom equipment maker, found four employees in violation of the company's policies on corruption as part of an internal inspection, a source familiar with the matter said.

In response to the findings, Huawei has held discussions with employees on what constitutes graft and affirmed the company's zero-tolerance on bribery, the source said, declining to be identified because he was not authorised to speak about the matter to the media.

The internal probe coincides with a government crackdown on corporate misbehaviour within both foreign and domestic firms. Chief Executive Ken Hu told the Financial Times on Thursday that graft inspections were done every year and "nothing new," adding that it only attracted media attention this year.

Huawei has declined to address the exact nature of the cases. Local financial news outlet Caixin, which first reported the inspection last week, said a total of 116 employees were implicated in soliciting and accepting bribes from outside sales agents in exchange for rebates.

"In the enterprise market, Huawei is firmly implementing an open, transparent and stable channel policy, in order to pursue fairness and justice in the market, and to fight firmly against any form of employee practice that fails to meet the standards we set for ourselves," Huawei said in a statement this week.

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Despite Huawei's leadership vowing for years to tackle corruption within the ranks, the company has been trailed by allegations of bribery particularly in emerging markets where it has enjoyed robust growth.

In the past year, Huawei has been investigated in Uganda and Zimbabwe over how it won telecom contracts. In 2012, executives from Huawei and Chinese rival ZTE Corp, were sentenced by an Algerian court to 10 years in prison on bribery charges.

In the meantime, Huawei has pledged greater transparency in its technology to address concerns about potential espionage. The company has offered to give security-cleared officials in the United Kingdom and Australia complete access to its software source code and hardware equipment.

© Thomson Reuters 2014