Top researcher denies being paid huge bribe by Qualcomm
Print Edition
A RESEARCHER at the Chinese Academy of Social Sciences yesterday dismissed claims that he took a bribe to compile evidence in defense of Qualcomm Inc, which has been the subject of an antitrust investigation since late last year.
The allegations against Zhang Xinzhu emerged after the National Anti-Monopoly Commission said on Tuesday that he had been sacked from its professional advisory panel for “violating working rules.”
In a report on the Economic Observer’s website, an unnamed source was quoted as saying Zhang received “6 million” from Qualcomm — the world’s biggest cellphone chipmaker — for helping produce a report defending it against the antitrust allegations.
The source was said to be unclear as to whether the amount was 6 million yuan (US$974,000) or US$6 million.
In a separate report yesterday on the website of Caixin magazine, Zhang admitted having provided consultancy services to Qualcomm, but dismissed being paid “6 million.”
The American company, which has not commented on the graft charge, said in November it was the subject of an antitrust probe by the National Development and Reform Commission, but claimed it was unaware of having committed any violations, it said.
The NDRC confirmed the investigation in February, saying Qualcomm had been accused of charging local companies “unreasonably high” license fees and abusing its market position in China.
Xu Kunlin, head of the NDRC’s anti-monopoly and price supervision bureau, said the probe was triggered by complaints from unspecified Chinese industry associations and companies.
According to sources quoted by China News Service yesterday, after the launch of the investigation, Qualcomm appointed Zhang to help compile “economic evidence” to prove its innocence.
They claimed also that a report submitted in May by a Qualcomm executive to the anti-monopoly bureau listed Zhang as a major contributor.
Qualcomm sought to leverage Zhang’s standing and reputation to undermine the antitrust probe, using the angle that even Chinese experts did not believe it was engaged in monopolistic practices, China News Service said.
In a separate interview with the Oriental Morning Post on Tuesday, Zhang said he was fired simply because he had spoken up for a foreign firm.
“It was as if I’d defended a condemned criminal. But every coin has two sides, and neither side should be deprived of the right to speak,” he said.
He went on to criticize the way Chinese authorities conduct anti-monopoly probes, suggesting they often go “searching down blind alleys,” the report said.
Zhang also told Caixin that when the NDRC investigation into Qualcomm was launched last November, he was neither informed about it nor asked his opinion.
Despite Zhang’s protestations, sources quoted by China News Service said that regardless of the bribe allegation, the researcher had violated working rules by providing consultancy services to Qualcomm without first gaining approval from the National Anti-Monopoly Commission.
The NDRC has yet to announce the completion of its anti-monopoly investigation into the technology firm, but the sources said that Zhang’s dismissal was an indication it was nearing its end.
Under China’s anti-monopoly law, the NDRC can impose fines of up to 10 percent of a company’s revenue. Qualcomm’s earnings for the financial year ended September 29 totaled US$12.3 billion.
The Qualcomm probe is one of myriad launched into Chinese and foreign companies since last year.
On July 29, the State Administration for Industry and Commerce said it had begun investigating Microsoft in relation to problems resulting from the fact it had not fully disclosed anti-competition information about its Windows operating system and Microsoft Office program.
Meanwhile, Shanghai GM, a joint venture between SAIC and General Motors, said on Tuesday that it had “assisted” in an anti-monopoly investigation into China’s auto industry, which began in February.
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