HP Drawn Into German Kickbacks Investigation

Three one-time employees of HP were arrested by German officials, investigating alleged kickbacks paid in connection with an HP contract for Russian law enforcement equipment, according to The New York Times.

Hewlett-Packard is cooperating with German and Russian authorities after news that three people who worked in a Germany office of the California-based PC manufacturer were arrested by German authorities.
The arrests came as part of an investigation into "alleged kickbacks paid in connection with a contract to supply equipment to Russian law enforcement," The New York Times reported April 15.

The kickbacks are said to have occurred from 2000 to possibly 2007 and totaled approximately $10.9 million.

The Times quoted a spokesperson for the Dresden state's attorney's office who said that two of the people no longer worked for HP, but he was unclear about the third. An HP spokesperson in Switzerland declined to offer clarification, according to the Times.
The investigation included nine individuals in all. In addition to the three affliated with HP, three Russians and three Germans, said to have worked as middlemen for smaller firms, were also involved. Though the Times reports that they have not been arrested.
"This is an investigation of alleged conduct that occurred almost seven years ago, largely by employees no longer with HP," a spokesperson for HP told eWEEK. "We are cooperating fully with the German and Russian authorities and will continue to conduct our own internal investigation."
While HP is the leading PC manufacturer both worldwide and in the United States, it began 2010 with growth below the worldwide average, according to April 14 reports from Gartner and IDC. While HP improved worldwide sales by 19.9 percent between the first quarters of 2009 and 2010, Acer grew its shipments by 54.3 percent, Lenovo saw 59.2 percent growth and Asus posted an impressive 114.8 percent growth.