03 November, 2012
"I have sent business contacts at free trips"
He has worked in China since 1997, e.g. as Vice President at Ericsson China and senior management position at Nokia but also as club owner. Many times have David Almström have closed encounter with the extensive corruption in the country. He himself have also done things with business acquaintances that might be considered as bribery in Sweden.
This article was posted in Svenska Dagbladet, SvD
- China is still extremely corrupt. I have been directly asked several times to give and get bribes. It's a kafkaesque system where all takes a lot of time, says David Almström
He has been in direct touch with bribery both within the iT and telecoms as well as in the restaurant business. David Almström's short time as part-owner in a nightclub ended up in a total fiasco, due to the extensive corruption.
- It was a lot of those things. I never got to see the daily business, only part-owner, but I did see any money there as well. I tried to recover what I invested but that was impossible.
Today, David Almström lives in Sweden but still owns a cafe in Beijing and works towards China as head of Scandinavia for the software development company, Symbio. And during his 15 years in China, he frequently was subject to bribery and got many requests from customers.
- One example was a fairly small deal of $50-60,000 whereby I met the CEO of the customer. He immediately declared he expected a new computer to sign the deal. We said no and also did not get the deal, says David Almström
And it is custom for both local and multinational companies use bribes in their daily business, according to David Almström. However, the Chinese government have increased their efforts to control the bribes during the last years. And when bribes get revealed, it may end quite badly for the parties. One of the top manager at China Mobile was prosecuted last year for accepting briberies from many telecom companies - Ericsson was one of them [NB: I actually did not mention any companies that was involved in the bribery]. Punishment: Death Penalty with a reprieve (normally not carried out).
- It a fairly tragic situation. I know him for a long time and he had a reputation of being one of the more honorable in the industry, someone who do not accept bribes. But as it turns out, 15 years ago he accepted a bribe. And in China, almost every one at that level has done something not acceptable.
Though David Almström explains he himself has avoid the bribes, he has been in the gray zone. Traditionally, it's been important to maintain a good and close relation with the corresponding business partner in China, and it's not uncommon for companies to 'all-inclusive' nights out to pure tourist trips, he says.
- I have myself taken a person on a trip. Surely, we had some meetings but it was definitely a covered tourist trip, he says
- But today the situation is different, the relationships are cleaner. Multinationals keep bribery on an arm lengths distance, looking the other direction and pray all is good.
As the government been much tougher on corruption, the bribes have been far more sophisticated, says David Almström. One strategy to escape the government's sharp eyes is to use antiques to laundry money. The one who wants to give a bribe buys an antique for e.g. $250,000. Thereafter makes a copy at a fraction of the cost, to be able to show something during a revision. The original is being give as a bribe. The bribed returns to the antique dealer and sell it back and gets his $250,000 in cash.
- As antiques are very difficult to trace, it has become an efficient way of laundry money. There a quite a few of these advanced methodologies to hide the bribes, says David Almström
If you as a businessman stays away from the bribes, you certainly will lose some deals, explains David Almström.
- But question is if you want those contracts. You may have something on the person you bribe, but if gets exposed, you yourself will suffer as much, he says.
What do you do as a businessman if you do not want to participate at all in the corruption carousel?
- Primarily, you have to work with people that you trust, manage as much as possible by yourself and accept failure before cheating to be successful.
- But it is impossible to be 100% fault tolerant. You can sign clauses in the contract of zero tolerance; keep a tight control of your business, but it's really difficult to be sure that everything is according to the book.