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SCMP Reporter

FIS executive says lawsuit by Beijing IT consultancy is filled with untruths

Fidelity Information Services (FIS), a US banking software supplier, has denied bribing officials at Bank of China (BOC) and China Construction Bank (CCB) to gain business.

FIS this month filed a motion with a US district court in Florida to dismiss a suit lodged by Beijing information technology consultancy Grace & Digital Information Technology alleging bribery.

Many of the entertainment, travel and gift expenses alleged by Grace to have been used to influence CCB officials had not been reimbursed by FIS, Simon Bakker, FIS's Asia Pacific regional director, said in a letter to South China Morning Post this week.

He also denied Grace's claim that FIS's China country representative Felix Chang Tsung had 'hastily fled' the mainland in the wake of last March's resignation of CCB chairman Zhang Enzhao amid corruption allegations, after Grace named him a co-defendant in a suit against FIS in a California court in December 2004.

Mr Chang, who remains FIS's China country representative, goes on home leave to Los Angeles at least four times a year, according to Mr Bakker. 'Felix's current absence from China is a scheduled family medical leave,' he added.

Grace sued FIS in California to recover US$58 million of commissions allegedly owed to it for helping FIS negotiate the 2001 sales of US$176 million worth of software to CCB. It filed the Florida suit this month while appealing the earlier case's dismissal on technical grounds last December.

Grace alleged in both suits that FIS, under its name Alltel Information Services,  bribed CCB's then president and chairman, Mr Zhang, as well as other bank officials in order to substitute Grace with Zhou Jianhua, a  friend of Mr Zhang's, and Hong Kong-listed Prosten Technology as sales agents.

FIS paid US$1.05 million of cash bribes to Mr Zhang and other CCB officials through Prosten and reimbursed US$170,028 worth of expenses submitted by Mr Zhou, Grace said in the  complaint.

The expenses included personal overseas trips by Mr Zhang and his wife  as well as by Mr Zhang's son, Cheung Kei-kong,  and Mr Cheung's rent in Hong Kong while working for HSBC. FIS also reimbursed a visit to Europe by Mr Zhang's daughter, Grace said.

Grace  alleged FIS subsequently attempted to bribe BOC officials and a government minister.

Mr Bakker  wrote that Grace's complaint 'is filled with untruths and distortions'. 'The purpose of such is clear - an attempt by Grace to have us pay it money in order to avoid being portrayed in a false light and to avoid having our reputation wrongly besmirched.'

FIS did not reimburse Mr Zhou   for Miss Zhang's air ticket to Europe but only his own travel expenses, Mr Bakker wrote.

Mr Zhou was not authorised by FIS for dealings with BOC, he said. In about 70,000 pages of documents FIS provided to Grace in the earlier suit, Mr Zhou merely mentioned he 'intended to accompany' a family member of a BOC employee on a trip to the US, Mr Bakker wrote.

Citing various legal precedents, FIS argued in a March 7 petition to dismiss the suit that Grace's allegations did not satisfy the legal requirements for valid racketeering and state law fraud suits.

The mainland regulatory agencies instructed the Chinese bank to terminate the project and void all the December agreements after the sacking of CCB's president Wang Xuebing in January 2002 amid allegations of corruption. Under their agreements, Grace was not entitled to commissions until CCB paid FIS, FIS said in a December filing with the California court.

CCB did not agree to proceed with a US$14 million loan software project at its Shenzhen branch until September 2003, 17 months after FIS legally terminated the agency agreement with Grace and 16 months after a May 2002 golf trip to Pebble Beach, Florida, by Mr Zhang arranged by Mr Zhou and paid for by FIS.



US software firm denies claim it bribed bank officials to win business