Bribery scandal hits Chinese telecoms deal

A senior government official in the Philippines has told investigators this week that he was offered a bribe of up to $4.5m to help a Chinese manufacturer win a $331m internet infrastructure project.

The Philippines government has since suspended the deal, which involved ZTE, China's largest publicly-listed telecoms equipment manufacturer.

The government official concerned, Romulo Neri, former director of the National Economic Development Authority, told senators that he was offered the bribe by a fellow government official during a golf game.

The other government official has denied the charges, and there is no suggestion that his actions were backed by ZTE.

ZTE had agreed to build a national broadband internet network to connect government offices in the Philippines.

The deal was signed in April 2007 by Philippines government officials and ZTE executives on the holiday resort island of Hainan in China.

Immediately after the signing, the officials reported that the signed contracts had been stolen from their hotel room. The original documents were never recovered.

Opponents of the deal, which include rival telecoms makers, have complained that it was signed without a full public bidding process.

One opposition politician described the deal's terms and conditions as " grossly disadvantageous to the government".

ZTE has petitioned the Philippines Supreme Court to let the deal go ahead, local media reported yesterday.

"This denial of due process has resulted and will continue to cause ZTE grave and irreparable injury if the questioned resolution is not reversed and set aside and the temporary restraining order lifted," the company stated.