Juniper Networks Faces Bribery Probe

Juniper Networks has admitted it is being investigated by US authorities over possible corrupt business practices.

News of the investigation was revealed within Juniper’s latest 10Q filings, required by the US Securities and Exchange Commission.

Bribery Probe

“The US Securities and Exchange Commission and the US Department of Justice are conducting investigations into possible violations by the Company of the US Foreign Corrupt Practices Act,” the company said in its filing.

“The Company is cooperating with these agencies regarding these matters,” it added. “The Company is unable to predict the duration, scope or outcome of these investigations.”

The US Foreign Corrupt Practices Act of 1977 is designed to prevent American companies and employees from making payments “to foreign government officials to assist in obtaining or retaining business.”

Whilst the investigation is ongoing, the company cannot make any other comment on the matter, although this has not stopped speculation as to what countries the allegations are concerned with. Bloomberg revealed that Juniper’s biggest customer outside the US is China Mobile Ltd, followed by VST Holdings Ltd in Hong Kong and Deutsche Telekom AG in Germany.

CEO Retirement

The news of bribery investigation follows hot on the heels of the unexpected news in late July that Juniper’s 52 year old chief executive officer (CEO) Kevin Johnson is to retire once a successor has been named.

The news surprised the markets at the time, given that it came on the back of impressive second quarter 2013 financial results, as the Sunnyvale, California-based company continued to benefit from equipment spending by telecom and mobile operators, who are looking to upgrade their networks to deal with rising data traffic demand.

However it should be noted that Juniper is not alone when it comes to facing bribery investigations. In May 2009, Sun Microsystems admitted to a bribery infringement, although that admission did not derail its acquisition by Oracle.

In September 2011 Oracle itself faced its own official investigation, over whether it allegedly violated anti-bribery laws in certain African countries. In the past Dell has been accused of taking bribes from Intel to include its chips in the Texan firm’s hardware, and HP has also faced similar charges.

More recently Microsoft admitted it is facing a bribery probe after claims that its partners took bribes in China, Italy and Romania to gain government contacts.

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