The Prague Post Online: Business: Bribery exposed in Tesco affair

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July 6th, 2008

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Bribery exposed in Tesco affair

Case a rare example of much rumored illegal practices

By Michael Heitmann
Staff Writer, The Prague Post
April 9th, 2008 issue

While hints and complaints of corruption regularly make the rounds in Prague business circles, rarely have such charges surfaced as prominently as they did in a recent case involving British retailer Tesco.

Prague 1 Municipal Court recently convicted one of Tesco’s former executives, Daniela Čepková, on attempted fraud charges after she sought a bribe worth 60,000 euros (1.5 million Kč/$93,000) from a Polish businessman. She was sentenced to one year of probation.

Last April, Čepková told Wlodzimier Malinowski that Tesco would stock his textile and clothing products in return for the bribe. Čepková had no authority to deliver on such a promise and pretended to hold her bosses’ position, according to court documents.

Tesco’s management caught wind of Čepková’s suspicious activities and called in police, said Jana Matoušková, corporate affairs manager for Tesco Stores Czech Republic. At the time, the police told Matoušková that this was only the second time they had opened a corruption inquiry concerning a private business; most corruption investigations involve public institutions.

The police soon caught Čepková and her accomplice, Valéry Koffi Oblé, red-handed as Malinowski handed her the bribe in an envelope at the Jalta Hotel on Wenceslas square.

Čepková’s conviction, which can still be appealed, turned out not to be on charges of corruption, however. The presiding judge, Libor Vávra, found her guilty of attempted fraud instead.

“She was only trying to point to something wrong that she thought was going on in the company, the way they do in bad movies,” Vávra said at the court hearing March 31.

In a follow-up interview, Vávra told The Prague Post that if Čepková was trying to point out endemic problems at Tesco, she went about it the wrong way.

“She could have told police or the state prosecutor of her suspicions instead of acting on her own initiative,” he said, adding that “her motive may have been to undermine her bosses’ authority, with whom she did not get along well, while also enriching herself.”

It can be difficult for private companies to prevent such bribery. For example, the energy utility giant ČEZ has a tender process that requires two groups of experts to evaluate the technical and economic aspects of any bid independently, said spokeswoman Eva Nováková.

Setting up two evaluation committees, one looking at the technical and the other at the financial aspects of a bid, can be a first step toward a comprehensive fraud risk management regime, said Sirshar Qureshi, director of PricewaterhouseCoopers’ forensic services department.

Corruption is still a problem in Central Europe, Qureshi said. A recent survey by his company found that 18 percent of polled companies in Central and Eastern Europe admitted to either soliciting or offering a bribe.

“What is even more serious is that 30 percent of companies had been asked to pay a bribe and 45 percent of companies felt that they had lost an opportunity to a competitor whom they believed may have paid a bribe,” he added.

Michael Heitmann can be reached at mheitmann@praguepost.com

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