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Investigation at Magyar Telekom unit shows tampering; company takes steps to improve controls

Magyar Telekom on Thursday said an initial report on two suspicious contracts at its units in Montenegro and extended to two additional contracts signed by the parent company shows documents related to the contracts were tampered with or destroyed by employees.

It added that the independent auditors investigating the contracts had also found suspicious contracts at another subsidiary. Magyar Telekom stressed it had taken steps "designed to enhance its internal controls and compliance and governance regime." The announcement reveled that several employees were suspended who later resigned during the investigation.

Suspended employees included those employed by Magyar Telekom's strategic business, one of the heads of the Montenegrin unit TCG. TCG board members were also replaced. The announcement was made just hours before Magyar Telekom shareholders were scheduled to convene for a general meeting, with the hope of approving the company's 2005 financial report, which has been delayed since the spring because of the investigation. Magyar Telekom said in the statement that it could not predict when the investigation would end or what its outcome would be. (Mti-Eco)